Companies Use Your Data to Charge You More. Five States Said No.

Grocery store aisle with shelves of products and price tags

TL;DR:

What is surveillance pricing: Companies use your personal data (location, browsing history, purchase patterns, income estimates) to charge you a different price than the person next to you. Same product. Different price. Based on what algorithms predict you’ll pay. ^[1][2]
Three states have acted: Maryland became the first state to ban surveillance pricing on groceries (signed April 28, effective October 1). Colorado passed a broader ban covering all pricing. Connecticut passed SB 4 covering all retail goods. ^[3][4][5]
Two more are moving: California’s AB 2564 cleared committee and heads to the floor. Michigan’s HB 5771 was introduced in March with 31 co-sponsors. ^[6][7]
Companies are getting caught: Target paid $5 million over location-based pricing. Instacart was caught charging different prices to different shoppers at the same store. JetBlue faces two federal class-action lawsuits. Bay Area hotel sites charged residents up to $500 more per night. ^[1][8][9]
Federal action is slow: The FTC published a study finding widespread use of personal data for pricing. The House Oversight Committee launched an investigation in March 2026. But no federal ban is on the table. ^[2][10]

How Surveillance Pricing Actually Works

You search for a flight. You check a hotel. You browse groceries on an app. Every click generates data. That data gets fed into pricing algorithms (often built by third-party companies you’ve never heard of) that calculate the maximum price you’re likely to accept.

The FTC calls them “intermediary companies.” In January 2025, the agency published findings from a study of eight of these firms. The results were blunt: companies are using “a wide range of personal data” to set individualized prices, and the tools “increase revenue” for the businesses using them. ^[2]

Here’s what goes into the calculation:

Your location. Your IP address and GPS data reveal your zip code. Companies know the median income of your neighborhood. If you live in a wealthier area, you may see higher prices.
Your browsing behavior. How many times you’ve looked at a product. Whether you’ve compared prices. How long you spent on a page. All signals for how desperate you are to buy.
Your purchase history. Past spending patterns tell algorithms your price tolerance. If you’ve paid premium prices before, you’ll see premium prices again.
Your device. iPhone users have historically been shown higher prices than Android users on some platforms. The device you own is treated as a proxy for what you can afford.
Your life events. The FTC research described a concrete example: “if a consumer is profiled as a new parent, the consumer may intentionally be shown higher priced baby thermometers on the first page of their in-app search results.” ^[2]

This isn’t dynamic pricing, where a flight costs more during peak travel season. That responds to market conditions. Surveillance pricing responds to you. Two people standing in the same store, buying the same product, paying different prices because an algorithm decided one of them would tolerate paying more.

The Companies That Got Caught

Target: In 2022, Target paid $5 million to settle a lawsuit brought by the San Diego County district attorney over location-based pricing. Customers in different areas were being charged different prices for the same products. ^[1]

Instacart: In December 2025, reporting revealed that Instacart “charged hundreds of people, including at least 53 who lived in California, different prices even if they were shopping for groceries in the same store at the same time.” Same store. Same items. Different prices. Instacart later announced it would stop the “experimental practice.” ^[1]

Hotel booking sites: A 2025 study found that Bay Area residents were charged up to $500 more per night than people in less affluent areas on platforms like Booking.com. Your zip code was essentially a surcharge. ^[1]

JetBlue: Two federal class-action lawsuits were filed in April and May 2026 alleging the airline used individualized consumer data (IP address, geolocation, pages visited, purchase history) to adjust fares based on what each customer was likely to pay. The suits cite the Federal Electronic Communications Privacy Act and state consumer protection laws. ^[9]

Apartment rentals: Price-fixing algorithms used by landlords cost apartment renters $3.8 billion in 2023 alone, according to a White House study. Regional rent increases ranged from $34/month in Los Angeles to $99/month in San Diego. ^[1]

And these are just the ones that got caught. The FTC found that the intermediary firms building these pricing tools are actively marketing their ability to extract more money from individual consumers. The selling point to retailers is explicit: our algorithm will figure out who will pay more, and charge them accordingly. ^[2]

The State-by-State Breakdown

Maryland: First in the Nation (Signed April 28)

Governor Wes Moore signed the Protection From Predatory Pricing Act (HB 895) on April 28, 2026. It takes effect October 1. ^[3]

The law bans food retailers and third-party delivery services from using personal data to “set a higher price for a single consumer or from setting a higher personalized price” based on personal information. Enforcement is through the state attorney general only: no private lawsuits. Companies get a 45-day cure period to fix violations before facing penalties. ^[3]

Exceptions exist for promotional pricing, loyalty rewards, and cost-based price differences. It’s narrow (groceries only) but it’s the first law of its kind in the country.

Colorado: The Broadest Ban

Colorado’s HB 26-1210 goes further than Maryland. Instead of limiting the ban to food, it applies to data-driven individual pricing practices broadly, plus wage-setting restrictions. It also includes a private right of action, meaning individual consumers can sue, not just the attorney general. ^[4]

That private right of action is a big deal. It’s the difference between a law that depends entirely on the AG’s office deciding to act and one that lets consumers hold companies accountable directly.

Connecticut: Mandatory Disclosure

Connecticut’s SB 4 covers all retailers of tangible personal property and third-party food delivery services. The ban on “surveillance pricing” is defined as “establishing customized prices for a specific consumer based on personal data.” ^[5]

Connecticut added something the other states didn’t: a mandatory disclosure requirement. If a retailer uses a “price setting device” that adjusts prices based on personal data, the transaction must include the notice: “THIS PRICE WAS INCREASED BY A PRICE SETTING DEVICE USING YOUR PERSONAL DATA.” ^[5]

Imagine seeing that at checkout. Connecticut is betting that forcing companies to say it out loud will kill the practice faster than any fine.

California: AB 2564 Advancing

California Assemblymember Chris Ward’s AB 2564 cleared committee and heads to the Assembly floor. It would prohibit retailers from setting different prices based on personal information collected through electronic surveillance. ^[6]

“This practice hits hardest for low-income individuals and shoppers and those with limited shopping options,” Ward said. ^[1]

Consumer Reports is backing the bill. The California Chamber of Commerce is fighting it, arguing the bill would prevent stores from offering discounts. The bill still needs to clear the full Assembly and Senate before reaching Governor Newsom’s desk this fall. ^[6][11]

California Attorney General Rob Bonta didn’t wait for legislation. In January 2026, he launched an investigative sweep, sending inquiry letters to businesses in retail, grocery, and hotel sectors about their use of personal data for pricing. ^[10]

Michigan: 31 Co-Sponsors and Counting

Michigan’s HB 5771 was introduced March 19 with 31 co-sponsors, a strong signal of legislative support. The bill would amend Michigan’s Consumer Protection Act to prohibit surveillance pricing. It’s currently in the Economic Competitiveness Committee. ^[7]

Like the other bills, it exempts loyalty programs, senior/student discounts, and situations where consumers knowingly provide information in exchange for a lower price.

The Federal Response: Studies, Investigations, No Law

The FTC has been studying surveillance pricing since mid-2024, when it ordered eight intermediary firms to hand over documents about their pricing tools. The January 2025 report confirmed what consumer advocates had been saying: companies are systematically using personal data to maximize what individual consumers pay. ^[2]

In April 2026, FTC leadership told Congress that the agency’s surveillance pricing work continues and that it’s evaluating whether companies should be required to disclose when prices are personalized. ^[10]

On March 5, 2026, the House Oversight Committee launched its own investigation, sending letters to consumer-facing companies demanding information about their use of AI-based pricing, consumer data sources, pricing experiments, and consumer disclosures. ^[10]

What nobody in Washington has done: introduced a federal ban. The FTC is studying. Congress is investigating. States are legislating. The gap between federal awareness and federal action is exactly why Maryland, Colorado, and Connecticut moved first.

Why This Is Happening Now

Three things converged.

Inflation made people pay attention to prices. With inflation running at 3.8% and 55% of Americans reporting worsening financial situations, the idea that a company is using your data to charge you even more hits different than it would have in 2019. Surveillance pricing went from abstract privacy concern to kitchen-table issue. ^[1]

The tools got better. AI-powered pricing algorithms are cheaper and more sophisticated than they were five years ago. The FTC found that the intermediary firms are actively selling retailers on the premise that personalized pricing boosts revenue. The technology that enables surveillance pricing is accelerating faster than the laws governing it.

Companies got sloppy. The Instacart incident was documented in detail. The hotel price differentials were measurable. The JetBlue lawsuits include specific technical allegations. When surveillance pricing was invisible, no one could legislate against it. Now there’s evidence.

What Happens Next

October 1, 2026: Maryland’s ban takes effect. Grocery retailers and delivery platforms operating in Maryland must stop using personal data to set individualized prices.
California fall session: AB 2564 needs to clear the full Assembly and Senate. Industry opposition is fierce, but consumer support is strong.
More states are considering bills. New York has a bill pending that would ban surveillance pricing and electronic shelf labels in grocery stores. Multiple other states are watching how Maryland’s law plays out before introducing their own versions.
The lawsuits are piling up. Two federal class-actions against JetBlue in a single week. If those survive motions to dismiss, every airline and retailer using personalized pricing will be on notice.
The FTC could act. The agency has the authority to declare surveillance pricing an unfair or deceptive practice under Section 5. Whether the current commission will use that authority is another question.

What You Can Do Right Now

Use a VPN when shopping online. It masks your IP address and prevents location-based price adjustments. This is the single most effective tool against zip-code-based pricing.
Clear cookies and use private browsing. Pricing algorithms use session data and browsing history. Start each shopping session fresh. Better yet, use a different browser entirely for purchases.
Compare prices across devices. Check the same product on your phone and a laptop. Check in a private window and a regular one. If the prices differ, you’re looking at surveillance pricing in action.
Opt out of data sharing. Loyalty programs and store apps are primary data sources for pricing algorithms. Read the privacy policies. Use the opt-out mechanisms. If a store requires an app for the lowest price, that’s the trade they’re making visible: your data for a discount.
Contact your state representatives. If you’re not in Maryland, Colorado, Connecticut, California, or Michigan, your state probably has no surveillance pricing law. Connecticut’s mandatory disclosure approach is a good model: tell your legislators about SB 4.
File complaints. If you discover you’re being charged more than someone else for the same product, file a complaint with your state AG’s consumer protection division and the FTC at reportfraud.ftc.gov.