A controversial bill in California, AB 2564, aimed at prohibiting "surveillance pricing"—where personal data influences consumer prices—is facing strong opposition from grocery stores and retailers who warn it could dismantle popular discount and coupon programs.
Sponsored by Democratic Assemblymember Chris Ward, the legislation seeks to prevent companies from using data gathered through apps, web browsing, and data brokers to set prices based on individual consumer profiles. Proponents argue this practice unfairly targets vulnerable populations, potentially leading to higher costs for low-income individuals and those with limited shopping options. "The last thing anyone needs is to be charged higher prices based on their personal data," Ward stated in March.
However, opponents contend that the bill's broad scope could have unintended consequences for affordability. The California Retailers Association argues that personalized loyalty programs, digital coupons, and weekly specials, which are crucial for many families managing tight budgets, rely on the same data collection methods. "Families are stretching every dollar right now. The last thing they need is Sacramento making that harder," said Rachel Michelin, president of the California Retailers Association. "This is a solution looking for a problem, and it moves California in exactly the opposite direction of affordability."
The bill includes exceptions, allowing discounts if prices are publicly available or based on criteria that are publicly disclosed and achievable by broad groups, such as signing up for a newsletter or belonging to a membership program. However, critics argue these provisions create significant hurdles that could effectively discourage retailers from offering personalized discounts altogether.
An opposition coalition, Californians for Consumer Affordability, stated that AB 2564 establishes a complex legal framework with high compliance costs, potentially leading small businesses to discontinue discount programs due to the perceived risk. Retailers have advocated for the bill to focus solely on prohibiting price increases, rather than impacting discount mechanisms.
Assemblymember Ward has indicated ongoing discussions to address concerns about inadvertently harming discount programs. Consumer advocates, including those from Consumer Reports, have pushed for transparency requirements to ensure discounts do not become a "backdoor" to personalized pricing. Ward has stated his intention is not to eliminate discounts but to ensure they are not unfairly manipulated through personal data. The bill is expected to move forward for consideration by the governor by the end of August.