As excerpted from Governing:

In April, Maryland became the first state to ban surveillance pricing for grocery stores and food delivery services, setting a potential precedent for other states as consumers grow increasingly wary of companies using their data to offer them higher prices.

“At a time when Marylanders are already stretched by the rising cost of groceries, housing and everyday necessities, we must ensure that new technologies are not used to drive up the bill for working families,” Gov. Wes Moore said in a statement announcing the Protection from Predatory Pricing Act.

Critics of these pricing practices (also called “personalized pricing”) say the practice allows companies to unfairly upcharge some consumers based on their personal data.

“Grocery store chains are using reams of personal data to charge people different prices for the same bag of groceries,” writes Economic Action Maryland, a group backing the law. “With surveillance pricing, your personal data is used to adjust the price to what an algorithm has calculated you will pay. … Shoppers don’t have this information to make decisions about prices or know that their bag of groceries costs $10 more than their next-door neighbors.”

Maryland’s law was inspired by the proliferation of electronic shelf labels in stores, which could in theory be updated rapidly to display higher prices for goods based on the weather, time of day or detailed consumer data, according to the Moore administration. An earlier version of the law would’ve stopped businesses from changing their prices within the same business day.

The new law specifically bans companies from using personal data to set individualized,

higher prices for consumers. The law clarifies that it does not block “temporary changes or changes to pricing” intended to retain existing customers.

Some advocates, however, say the law should’ve also barred setting individualized discounts. In theory, a store barred from upcharging based on personal data could still artificially raise all its baseline prices, then offer individualized discounts to consumers based on assumptions of what they’re willing to pay.

The Maryland Retailers Alliance, on the other hand, says the state law is completely unnecessary, especially in its focus on food retailers. The state’s existing consumer protection law already bars misleading or discriminatory pricing, the alliance says, and the attorney general “has no record of substantiated complaints indicating a pattern of grocery stores engaging in unlawful predatory pricing increases.”

Click here to read the full article from Governing.