Seattle Passes Bill Banning Personalized Pricing At Grocery Stores

Seattle lawmakers voted this week voted to prohibit grocery stores from setting prices based on a host of personal information, including web-browsing history and demographic characteristics.

Mayor Katie Wilson has not yet signed the Fair Pricing and Transparency Act (CB 121267) into law.

If enacted, the bill would only apply to grocery stores with at least 20 retail locations globally. The measure specifically would outlaw "algorithmic-based price discrimination," which includes setting prices based on "automated analysis of the consumer's behavior, location, demographic characteristics, biometric data, or other personal information."

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Though broadly prohibiting pricing based on location data, the measure would let grocers take a customer's location into account when charging for deliveries. The bill also allows stores to offer loyalty programs, and to offer discounts to members of large groups -- such as teachers, military personnel, students, senior citizens, employees and residents of a certain area.

The watchdog Consumer Reports supported the bill, arguing in a letter to Seattle council members that personalized pricing can harm consumers in several ways, including "by offering different prices based on a protected status," and "by pushing them to pay the most they are individually willing to pay."

Seattle's measure comes as lawmakers are increasingly eyeing personalized pricing. Earlier this New Jersey enacted a "surveillance pricing" bill that prohibits businesses from using shoppers' personal data -- including web browsing data and other information linkable to individuals -- to set grocery prices.

Maryland and Connecticut have also banned some forms of customized pricing. Other states, including New York, are considering similar restrictions.

The Federal Trade Commission proposed last month that companies using personal information to set individualized prices should disclose that practice in situations where personalized pricing would come as a surprise.

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