New Jersey surveillance pricing ban adds pause on digital shelf labels

New Jersey surveillance pricing rules now bar businesses from using shoppers’ personal data to charge different prices for identical goods, after Gov. Mikie Sherrill signed the Fair Price Protection Act, according to the Governor’s Office. The law also places a one-year moratorium on the new use of electronic shelf labels while the New Jersey Innovation Authority studies the technology’s impact.

The Governor’s Office said Thursday that the measure is intended to protect consumers from discriminatory pricing based on information collected about them. The covered data includes online activity, location, purchase history and other personal information, according to the release.

Sherrill said in the release that companies should compete through prices rather than by using data to extract more from shoppers. She said the law is aimed at protecting privacy and fairness in pricing.

What does New Jersey's surveillance pricing ban cover?

Surveillance pricing refers to the use of personal information to set different prices for different customers buying the same product. Under the New Jersey law, businesses may not use data such as a shopper’s web activity, location or past purchases to vary the price of identical products.

The electronic shelf label provision is narrower. The law does not require retailers to remove digital labels already in use, according to the Governor’s Office. It stops new use for one year while state officials assess the technology.

New Jersey Attorney General Jennifer Davenport said in the Governor’s Office release that her office will enforce the statute to keep grocery prices fair, transparent and consistent, and not shaped by the use of consumers’ personal data.

The bill reached Sherrill’s desk on June 30 after passing the New Jersey Senate by a 22-14 vote and the Assembly by a 51-20-1 vote. The measure is listed as the Fair Price Protection Act by the Legislature.

Sen. Joe Cryan, one of the bill’s sponsors, said in a New Jersey Senate Democrats release that surveillance pricing is “an abuse of modern technology.” He said consumers should be shielded from intrusive use of algorithms, personal data and other technologies tied to food purchases or individual traits.

Sen. Joe Lagana, another sponsor, described surveillance pricing in the Senate Democrats release as “a modern form of consumer fraud.” He said the law is designed to stop deceptive practices and require equal treatment of shoppers without using their personal data against them.

Why did businesses and Republicans push back?

The New Jersey Assembly GOP said in a post on X that businesses opposed the Fair Price Protection Act because it could endanger loyalty programs, discount apps and member pricing. The post argued that grocery stores are not raising the price of staples at different times of day, but are using tools such as coupons for abandoned carts to encourage purchases.

Consumer Reports said New Jersey is the third state to enact a law curbing personalized pricing, after Maryland and Connecticut passed measures earlier this year. The group said New York lawmakers have approved a similar bill that is awaiting the governor’s signature.

The state action comes amid a wider policy fight over algorithmic price-setting. In May, more than 50 bills had been introduced across 26 states to restrict or ban the practice, according to prior reporting cited in the public debate over the New Jersey measure.

This story draws on original reporting from PYMNTS.