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Maryland is set to become the first US state to ban surveillance pricing in retail grocery stores, after the legislature last week passed the Protection from Predatory Pricing Act.
Also known as dynamic or personalized pricing, surveillance pricing is when a store charges different shoppers different prices for the same item at the same time, based on something the store “knows” about them as an individual.
Governor Wes Moore said he will sign the bill into law, which stops large retailers from using personal data to change prices in real-time, while still allowing for promotional offers and loyalty program benefits.
American consumers are subject to dynamic pricing millions of times every day when they are buying airline tickets online, using Uber, or ordering anything on Amazon.com.
This new law, introduced by Gov. Moore, was prompted by concerns that major retailers, such as Walmart, are adopting digital price tags on their shelves that can change instantly by using predictive technology to manipulate prices and hurt average consumers.
“At a time when Marylanders are already stretched by the rising cost of groceries, housing, and everyday necessities, we must ensure that new technologies are not used to drive up the bill for working families.” said the Democratic governor in January.
Consumer Reports lobbied for the bill, but says the final draft of H.B. 895 “falls short of adequately protecting consumers”, after the Maryland Retail Alliance, which strongly opposed the bill, successfully added several exemptions.
“Retailers have a lot of data about individual shoppers; how often we search for or hover over particular items, whether we live near competitor stores, inferences about our likes and dislikes, our dietary needs, our income, our family size, and more. Surveillance pricing allows companies to take advantage of that information asymmetry and charge you as much as they think you’re individually willing to pay,” said Grace Gedye, senior policy analyst at Consumer Reports (CR).
For instance, one Kroger’s shopper in Oregon requested their data under a state privacy law and received a 62-page profile—and most of the inferences were wrong.
The loopholes CR identified that weakened the bill, ironically included the exemption for loyalty or membership programs, because those prices are allowed to be raised—becoming more expensive than standard prices.
The good news is many other states are considering surveillance pricing bans including California, Colorado, Illinois, New Jersey, New York, and others—and maybe those states will resist adding loopholes.
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The key provisions of the Maryland act, which will go into effect on October 1, 2026, include:
- Grocery stores are required to keep their prices fixed for at least one business day to prevent hourly price spikes.
- Retailers are prohibited from using surveillance data—such as a customer’s shopping habits, ethnicity, or income—to set different prices for different individuals.
- Violations are treated as unfair or deceptive trade practices, but businesses only face fines of up to $10,000 for a first offense and up to $25,000 for subsequent violations.
CR described the bill’s enforcement provisions as weak, especially because consumers are not permitted to sue companies if they’ve been subject to surveillance pricing—a departure from Maryland’s primary consumer protection law. Only the Maryland Attorney General can bring suits, and is required to send companies a notice that they’ve violated the law and give them 45 days to fix violations without further legal ramification.
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Still, watch out for apps
And, it’s not just brick-and-mortar stores that are suspected of over-charging. Last December, Consumer Reports published an investigation into Instacart’s pricing tactics. CR had nearly 400 consumers shop for the same basket of goods at the same time.
Analysis of the shopping data found that consumers were paying different prices for the same products from the same store at the same time.
The investigation found that Instacart’s algorithmic pricing experiments could result in price differences as high as 23% for certain products and could cost families more than $1,200 a year at checkout.
Soon after, Instacart announced in a company blog post that it would end the program that resulted in different shoppers being shown different prices for groceries on its platform.
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