New York just forced companies to come clean about their pricing secrets. Starting now, businesses using personal data to set different prices for different customers must display a stark warning: 'This price was set by an algorithm using your personal data.' The groundbreaking transparency law targets the shadowy world of personalized pricing, where your shopping history could mean paying more than the person next to you.
New York just pulled back the curtain on one of retail's best-kept secrets. Companies that use your personal data to set custom prices now have to admit it upfront, thanks to disclosure requirements buried in the state's latest budget that are sending shockwaves through the tech and retail industries.
The law forces businesses to display a blunt message when algorithmic pricing kicks in: 'This price was set by an algorithm using your personal data.' It's a transparency mandate that according to The New York Times targets the practice of charging different customers different prices based on their digital footprints and spending habits.
Uber became the first major platform to comply, rolling out the disclosure to New York users this week. But the ride-hailing giant isn't happy about it. An Uber spokesperson told the Times the company considers the law 'poorly drafted and ambiguous' while insisting their dynamic pricing only factors in geography and customer demand, not personal shopping behavior.
The pushback reveals how little companies want to discuss their pricing algorithms. It's not even clear how widespread personalized pricing actually is among online retailers - a fact that makes New York's forced transparency even more significant. Without disclosure requirements, consumers had no way to know if they were getting personalized rates or standard pricing.
The retail industry fought hard to kill this law before it started. The National Retail Federation filed a federal lawsuit attempting to block the requirements, arguing they would create confusion and compliance burdens. A federal judge rejected their challenge and allowed the law to move forward, setting up New York as a testing ground for algorithmic pricing transparency nationwide.
Former FTC chair Lina Khan, now co-chair of the mayoral transition team for Zohran Mamdani, called the law an 'absolutely vital' regulatory tool. But she also warned there's a 'ton more work to be done' to properly regulate personalized pricing practices.
Khan's involvement signals this is just the beginning. Her track record of aggressive tech regulation at the FTC suggests New York could become a laboratory for even stricter algorithmic oversight. The law essentially creates a real-time audit trail of when companies deploy data-driven pricing, giving regulators unprecedented visibility into these black-box systems.
