NY Law: Rules on Algorithmic Pricing Effective November 10th
- The New York State Broadcasters Association
- 4 days ago
- 2 min read
While this may not affect most broadcasters, stations should be aware that companies using algorithmic pricing, i.e., pricing using an individual’s personal data, must disclose that this approach is being employed. The law was originally to become effective in July, but its enforcement was delayed pending the outcome of a lawsuit filed by the National Retail Federation. That lawsuit was dismissed recently, making way for the law to become effective.
On November 5th, NY Attorney General Letitia James issued an alert warning consumers about this practice. The press release stated:
“New York Attorney General Letitia James today issued a consumer alert warning New Yorkers about algorithmic pricing and encouraging them to report cases of companies using algorithmic pricing without properly disclosing it. Algorithmic pricing allows companies to automatically adjust prices based on individuals’ personal data, charging some consumers more than others depending on factors like their location, income, and previous shopping habits.”
The press release urges consumers to notify the attorney general if products do not display a disclosure:
“On November 10, New York’s Algorithmic Pricing Disclosure Act takes effect, requiring most companies that use algorithmic pricing to clearly display a disclosure notifying consumers that prices are set using their personal data. Attorney General James is urging New Yorkers who believe they have encountered algorithmic pricing that is not properly disclosed to file a complaint with the Office of the Attorney General (OAG).”
While the law is focused on product disclosures, stations should be aware of the new law. Also, stations that are offering subscription based digital services using personal data for pricing should examine these rules. These pricing approaches are often used “on businesses’ apps or as part of loyalty programs, where consumers may receive an individualized discount offering a different, personalized price.” Other examples could include, for example, charging different prices for hotel rooms based on a zip code or persons income.
You can see the Attorney Generals press release on the subject here.
You can access the new law, NY General Business Law §349(a) here.
