New York’s latest state budget introduces new rules for businesses. Companies that use personal data to set different prices for shoppers must now provide a clear disclosure. They are required to tell customers, “This price was set by an algorithm using your personal data.”
It is not clear how common this practice is among online retailers. An Uber spokesperson confirmed the company is now showing this disclosure to New Yorkers. However, the company described the law as poorly drafted and ambiguous. Uber insisted it only uses geography and customer demand to calculate its dynamic pricing, not personal spending history.
The National Retail Federation filed a lawsuit to stop the law, but a federal judge allowed it to move forward.
Lina Khan, the former chair of the Federal Trade Commission, commented on the new rule. She stated that the law will be an absolutely vital tool for the government. She also suggested there is a ton more work to be done to regulate the practice of personalized pricing.