Assembly committee forwards SB 259 to curb device-based "surveillance pricing"

The Assembly Bridal Consumer Protection Committee on Thursday voted to refer SB 259, a bill by Sen. Aisha Wahab to restrict "surveillance pricing," to the Judiciary Committee after a contentious hearing and an 8-1 roll call.

SB 259 would bar businesses from altering the price of goods or services based on consumer device characteristics or certain automated signals derived from a consumer's device unless an exception applies. Supporters say the bill closes a loophole that lets companies use phone model, battery state or geolocation as proxies for race, income or other protected traits; opponents warned the measure could interfere with legitimate pricing differences tied to location and operations.

Sen. Wahab framed the bill as an effort to stop corporations from using the type or model of a consumer's phone and other device signals to ‘‘engage in discriminatory pricing practices.’’ She cited published examples — the Princeton Review’s past pricing by ZIP code and news reports about hotel booking sites showing higher prices to Bay Area users — and told the committee, “SB 259 simply asserts that your device should not be a determinant of a price you are offered.”

The bill would be enforced under California's Unfair Competition Law, Wahab said, providing enforcement options to public prosecutors including the attorney general, district attorneys, and city attorneys; the author said the measure does not create a private right of action at the outset. Wahab told the panel that civil penalties in the bill could reach $2,500 per violation and described giving local prosecutors authority to act when harms are local.

Yvonne Fernandez, legislative advocate for the California Labor Federation, testified in support and called the practice “a high-tech assault on working people,” saying algorithms that incorporate device signals make affordability worse for wage-earners.

Business groups pressed for narrower language on geolocation and other carved-out uses. Ronak Deylan of the California Chamber told the committee the chamber had proposed amendments to remove or narrow the bill’s geolocation references and to define ‘‘precise geolocation’’ so ordinary regional price differences — for example, because of distribution costs — would remain allowable. Several trade groups registered opposition or urged amendments, including the California Retailers Association, TechNet, the California Travel Association and the Association of National Advertisers.

Assembly members from both parties sought clarification on how the bill would interact with loyalty discounts, veteran and senior discounts, and legitimate location-based pricing; Wahab said the bill is not intended to upend those programs and that the measure has room for regional, distribution-related pricing differences while targeting the use of device signals as proxies for attributes like race or income.

The committee approved a motion by Assemblymember Ortega, seconded by Assemblymember Wilson, to pass the bill as amended to the Judiciary Committee. The clerk announced the vote as 8-1.

SB 259 now goes to the Judiciary Committee, where staff and stakeholders expect additional negotiations on geolocation definitions and enforcement language before further floor action.