Maryland has become the first state in the country to ban dynamic pricing and using an individual’s personal data to increase grocery prices.
Gov. Wes Moore signed the Protection From Predatory Pricing Act on Tuesday.
The new law prohibits grocers and third-party delivery services from instantly increasing prices based on customer surveillance data. It targets a model in which prices are instantaneously changed for different customers. The law will take effect in October.
Mr. Moore, a Democrat, warned that the curated system harms the average shopper who unknowingly pays higher prices.
If two people were to go to a grocery store at the same time, “we could pick up the exact same item and be charged a different price for it, because they know that I’ll pay it,” he said last month. “This type of manipulation of data is not fair.”
“Marylanders deserve to know that the price they see on the shelf is the price they will pay at the register,” Mr. Moore said Monday in a statement.
The Maryland Retailers Alliance, which opposed the legislation when it was introduced, came to support it after the Legislature added several changes. It dubbed the bill a “workable framework” that prohibits the use of consumer data to increase prices while “preserving the ability for retailers to offer discounts and promotions that benefit consumers.”
Consumer Reports, a product testing and consumer advocacy group, previously lobbied for the bill, but said it now “falls short of adequately protecting consumers.”
“Surveillance pricing allows companies to take advantage of that information asymmetry and charge you as much as they think you’re individually willing to pay,” Grace Gedye, senior policy analyst at Consumer Reports, said in a statement. “While it’s encouraging to see the Maryland Legislature take up this issue, this bill has loopholes that will limit its real-world impact.”
The organization said several provisions of the bill undercut its purpose, such as not establishing a baseline or standard price and exempting subscription service prices and loyalty or membership program pricing.
The legislation also found opposition from Senate Minority Leader Steve Hershey, Caroline County Republican. He questioned why Maryland is the first state to prohibit the practice, saying there is no evidence that the state’s grocery stores were engaging in it.
Mr. Hershey said the law “creates the appearance of action without delivering real savings.”
“Marylanders are struggling with rising utility bills, housing costs and taxes, yet the Governor chose to sign legislation targeting a pricing practice that grocery stores themselves told us isn’t happening,” he said in a statement. “This was a solution in search of a problem. That makes this more about messaging than meaningful relief for Maryland families.”
