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Senate committee advances bill to ban personalized algorithmic pricing for groceries after heated debate
Summary
The Senate Commerce Committee voted to release a substitute merging S3612 and S3717 to ban personalized algorithmic pricing and limit surveillance pricing tied to consumer data for groceries and other foodstuffs; supporters cited fairness and consumer privacy while retailers and tech vendors warned the language could unintentionally bar ordinary discounts and electronic shelf-label uses.
Chair Lagana and sponsors moved a substitute that combines S3612 and S3717 into the Fair Price Protection Act and the committee voted to release it after extended testimony and debate.
The substitute makes using personalized algorithmic pricing or “surveillance pricing” to set or vary the sale price of groceries and other foodstuffs a violation of the Consumer Fraud Act, with limited exceptions for bona fide loyalty/discount programs. Beverly Brown Ruja, financial justice program director at New Jersey Citizen Action, told the committee the bill is "about fairness and affordability in the marketplace and protecting the privacy of consumers in New Jersey," saying companies can build profiles that result in different prices for the same product.
Industry witnesses pushed back. Drew Ambrogi of the tech trade group Chamber of Progress said the bill, as drafted, risks eliminating everyday discounts consumers rely on and would impose heavy compliance burdens on small retailers. "As written, the bill creates burdensome compliance for obligations and mandates that discounts be offered uniformly," he said. Jessica Vittorio, senior vice president for legal risk at Vision Group Inc., a vendor of electronic shelf labels (ESLs), told the committee "retail pricing technology is not surveillance technology" and urged precise technical definitions to avoid inadvertently banning lawful systems.
Sponsor senators and proponents cited consumer reports and research showing differential pricing online and argued the substitute is narrowly tailored to prohibit personalized, individualized price differences driven by consumer profiles. Senator Kryon said the focus is the individualized use of algorithms that change prices for particular shoppers, not ordinary sale pricing or bona fide loyalty discounts. John Hollub of the New Jersey Retail Merchants Association warned the draft confuses several technical practices — A/B testing, dynamic pricing and algorithmic personalization — and sought narrower language limited to price increases based on personal data.
The committee discussed electronic shelf labels at length. Proponents said the bill allows ESLs to continue if they are not connected to personalized algorithmic pricing; vendors countered that ambiguous terms such as "Internet connected" and "connected to pricing technology" could create legal uncertainty that would force businesses to remove useful digital labels.
After amendments and an exchange of suggested technical fixes, the substitute was released. Roll call showed Senator Bramnick abstaining and other members voting to release the substitute; sponsors and staff signaled ongoing negotiations to clarify technical definitions and carve outs for bona fide discounts.
Next steps: sponsors said they will continue to work with retail and technology stakeholders to tighten definitions and exemptions before floor consideration.
