Source: The New York Times

The New York Times reports that New York has become the first state in the U.S. to enforce a law specifically targeting "personalized pricing," a practice where companies use artificial intelligence and consumer data to tailor prices to individual shoppers. Under the new "Algorithmic Pricing Disclosure Act," businesses are now required to explicitly disclose when a price has been determined by an automated system using personal data. Retailers must display a notice stating: "This price was set by an algorithm using your personal data." The legislation aims to curb the opaque use of "surveillance pricing," where algorithms potentially charge customers more based on their browsing history, location, or perceived purchasing power.

This move marks a significant shift in AI regulation, moving beyond general privacy concerns to address specific economic harms and discrimination. Proponents argue that the law provides essential transparency, preventing companies from exploiting consumer data to maximize profits at the expense of fairness. However, business groups have criticized the measure as being too broad and potentially confusing. The enforcement of this law sets a precedent that could influence other states and federal regulators, highlighting the growing scrutiny on how AI is used to manipulate market dynamics and consumer behavior.