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Senate passes ban on in-store electronic shelf labels after debate over privacy and pricing
Summary
The New York State Senate on May 12 passed a measure prohibiting in-store electronic shelf labels, with supporters citing privacy and price-discrimination risks and opponents warning the change could raise prices by eliminating dynamic discounts.
The New York State Senate passed a bill on May 12 that would prohibit the use of in-store electronic shelf labels, a move sponsors said is intended to prevent retailers from using digital signage to surveil customers and set individualized prices. Senator Chuck Schumer — correction: Senator Michael Gianaris (Senator Michael Gianaris) sponsored the measure and defended it as a consumer-protection step to prevent “price gouging” tied to data collection.
Senator Michael Gianaris, the bill’s sponsor, told colleagues that electronic shelf labels could become tools for surveillance and price discrimination, saying, “This bill will prohibit the practice of electronic shelf labeling…because as technologies is emerging, that — those labels can be used to scan or listen to a person's conversation or scan their faces, and download personal data and set prices to specific to that individual that would result in what is effectively price gouging.” Gianaris argued the law is preemptive: retailers are planning and patenting tools that could enable algorithmic, individualized pricing.
Opponents warned the ban could have unintended effects on prices and retailers. Senator George Borrello (Senator Borrello) said the technology also helps businesses offer bona fide discounts and questioned whether restricting dynamic in-store pricing would raise standard prices: “If they have to pick one price, they are going to go with the price that confirms they are not going to lose money on that product at any time…So, in the end, we're not going to help affordability with this bill I don't think.”
Senator Phil Walczyk (Senator Walczyk) asked the sponsor whether the chamber had documented cases in New York of stores using the technology to target shoppers; Gianaris cited retailer statements and patent filings and said examples exist nationally and online marketplaces already use similar algorithmic pricing. The sponsor told the chamber he was not willing to wait until abuses were documented in New York when the tools are being deployed elsewhere.
After extended questioning and argument, the Senate restored the item to the non-controversial calendar and voted. The bill passed, with the roll call recorded as 50 in favor and 10 opposed. Senators listed in the negative were BORRELLO, CHAN, GALLIVAN, O'MARA, ORTT, STEC, TEDISCO, WALCZYK, WEBER and WEIK.
The measure, as read on the floor, would amend the General Business Law. The bill’s effective date and further technical definitions (including the FTC-based definition of “bona fide discount” referenced during debate) were read during calendar consideration. The Senate’s action sends the bill to the next step for enactment procedures.
The Senate concluded other business and adjourned to its next scheduled session.
