Maryland Governor Wes Moore has signed the Protection From Predatory Pricing Act, making Maryland the first state in the nation to prohibit certain forms of personalized pricing based on consumer data.
The legislation, signed Tuesday, bars food retailers and third-party delivery platforms from using dynamic pricing practices that set individualized prices using a shopper’s personal data.
Supporters say the measure is designed to prevent so-called “surveillance pricing,” where companies could raise prices based on factors such as purchasing habits, location data or other consumer information.
Moore’s office said the law bans price manipulation practices driven by the ability to instantly spike prices using surveillance data.
The measure arrives as retailers increasingly adopt electronic shelf labels and other digital pricing tools capable of changing prices in real time. Moore had previously warned that the technology could allow prices on household goods to surge based on time of day, weather conditions or detailed customer data.
The law takes effect Oct. 1. HB 895 classifies violations as unfair, abusive, or deceptive trade practices under Maryland law, which opens businesses to state enforcement actions and civil penalties. First-time violations can carry fines up to $10,000 and $25,000 for subsequent offenses
Retailers get a 45-day window to correct violations after receiving written notice before fines are applied. The law allows for loyalty program discounts, promotions, and price differences based on legitimate factors like shipping costs.
Consumer advocates praised Maryland for addressing the issue but said the final bill fell short of earlier goals. Previous versions were broader, but the final bill was narrowed during the legislative process.
The United Food and Commercial Workers International Union had urged Moore to veto the bill, saying loopholes could still allow unfair pricing tactics. Retail groups, meanwhile, softened earlier opposition after amendments were made during the legislative process.
Maryland’s move could become a template for states considering restrictions on surveillance pricing and algorithmic retail pricing. Maryland leads a growing number of states examining restrictions on data-driven pricing models, with California, Colorado, Illinois, New Jersey, and New York considering similar measures.
