Assembly budget creates new consumer protections for algorithmic pricing, subscriptions and AI companions; business groups raise implementation questions

The Assembly added a package of consumer protections to the budget text that covers four linked areas: algorithmic or dynamic pricing disclosures, limits on automatic subscription renewals and cancellation requirements, transparency for buy‑now‑pay‑later products (handled elsewhere in the bill), and rules for AI companion systems (software that mimics conversational relationships). The provisions were presented as an effort to update consumer protection law for digital markets.

Major provisions discussed on the floor:

- Algorithmic pricing disclosure: Businesses that use automated pricing models that incorporate consumers’ personal data must disclose that fact to customers. Exemptions were enumerated on the floor for banking, insurance and certain ride‑share services; sponsors said banks and federally chartered entities fall outside the requirement because they are already covered by other regulatory regimes. The disclosure language offered as a sample on the floor was short and required one clearly visible line telling the buyer the price was set algorithmically using personal data. Sponsors said the state Attorney General would enforce the transparency requirement and could bring civil enforcement actions.

- Subscription and automatic renewals: The text requires clearer disclosure of renewal terms, larger font or contrast for key language, and simple, electronic cancellation mechanisms. The language mirrors federal requirements in several places; sponsors said the goal is to make recurring charges transparent and easy to cancel.

- AI companions: For services described as “AI companion” or conversational agents that simulate people, the bill requires the operator to inform users at the start of any interaction and at regular intervals (the discussion described “every three hours” in practice) that the entity is not a human. Lawmakers also discussed whether operators should be required to escalate or flag statements that indicate suicidal ideation; the floor sponsor said the bill includes protocols for serious safety signals but left technical details to implementing rules.

Floor debate focused on two topics: scope and enforcement. Supporters argued the rules give consumers basic notice and allow them to make informed choices when prices or interpersonal interactions are algorithmically generated. Critics warned the exemptions captured many large platforms and affiliates (which could blunt the law’s reach) and said the requirements will pose difficult questions for implementation, including how to define algorithmic pricing precisely and how small businesses using price‑recommendation services would be treated. Lawmakers also questioned whether disclosure alone would change consumer behavior where markets are concentrated.

Ending note: Sponsors told colleagues the Attorney General would be the primary enforcement authority and urged regulators to work quickly on rules to clarify obligations for businesses. Implementation will require administrative rulemaking and interagency coordination.