On February 17th, Consumer Reports testified at a hearing about Maryland Gov. Moore’s bill to tackle surveillance and dynamic pricing for groceries. CR took a favorable with amendments position, suggesting amendments to the bill to make it work better for consumers and the marketplace writ large.
Surveillance pricing, also sometimes referred to as “personalized” pricing, is when a company uses personal data that they’ve gathered about a consumer—like data about their online search history, or inferences about family structure, health conditions, or income—to set the price of a product or determine the discount offered to a consumer.
SB 387 primarily applies to retailers that sell groceries and have large grocery stores in Maryland. The bill would prohibit covered retailers from enacting surveillance pricing, and also from changing food prices more than once every 24 hours. The latter is aimed at preventing unpredictable and extreme surge pricing, a strategy retailers could employ to constantly increase or decrease prices throughout the day based on a variety of factors, including predicted demand.
CR suggested several changes that would protect consumers while adding reasonable exemptions for transparent discounts. CR’s suggestions include:
- Use the existing definition of “personal data” in Maryland law to increase clarity, ensure consistency of compliance, and ease compliance
- Cover online grocery delivery platforms in addition to traditional grocery retailers
- Add narrowly tailored exemptions for transparent discounts and cost-based price differentials
See the attached letter for more.