Maryland has moved to the forefront of state-level efforts to regulate algorithmic pricing, becoming the first U.S. state to ban the use of “surveillance pricing” in grocery stores. The new law, signed by Governor Wes Moore, reflects growing unease among policymakers over how data-driven pricing strategies intersect with consumer protection, particularly in essential sectors like food retail.
At its core, the Maryland statute prohibits grocers and third-party delivery platforms from using personal data, such as location, browsing history or demographic characteristics, to charge higher prices to specific consumers. The measure targets a form of dynamic pricing that critics argue enables companies to extract maximum willingness to pay from each shopper, effectively eroding the concept of uniform pricing in retail markets.
According to the Guardian, Moore framed the law as a direct response to the growing analytical capabilities of large companies. At the bill signing, he emphasized that advances in predictive technology have made it possible not only to anticipate consumer demand but also to identify when individuals are likely to pay more. In that environment, he argued, the state has a responsibility to intervene to prevent exploitative pricing practices.
The focus on grocery stores is particularly significant from a regulatory standpoint. While the Federal Trade Commission has documented the use of surveillance pricing across multiple retail categories—including apparel, beauty products and home goods—consumer advocates argue that its application in grocery retail raises heightened concerns because it directly affects access to basic necessities.
Maryland’s action comes amid a broader but fragmented policy landscape. Several states, including California, Colorado, Massachusetts, Illinois and New Jersey, are considering similar legislation. At the federal level, however, regulatory momentum remains uncertain. The FTC initiated an inquiry into surveillance pricing under the Biden administration and released preliminary findings indicating that companies draw on extensive pools of personal data to differentiate prices. But the current FTC leadership has signaled skepticism toward that effort, with Chair Andrew Ferguson reportedly dismissing the earlier report as rushed.
Related: Senators Introduce Bill to Ban Surveillance Pricing in Grocery Stores Nationwide
That divergence underscores the likelihood that states will continue to serve as primary laboratories for policy experimentation in this area.
Despite its first-mover status, Maryland’s law has drawn sharp criticism from consumer advocates and privacy groups, who argue that it is undermined by significant carveouts and weak enforcement mechanisms. A central concern is the law’s exemption for loyalty programs and promotional discounts. Critics contend that these provisions allow companies to replicate the economic effects of surveillance pricing by raising baseline prices and then selectively offering individualized discounts—arriving at the same discriminatory outcome through less transparent means.
Enforcement is another flashpoint, per the Guardian. The statute grants enforcement authority exclusively to the state attorney general, omitting a private right of action for consumers. Advocacy groups argue that this limitation materially weakens deterrence by reducing the likelihood of litigation and placing the burden of enforcement solely on public authorities. As one critic noted, meaningful compliance typically depends on the credible threat of private lawsuits, which the Maryland framework does not provide.
Consumer Reports has also flagged what it describes as “weak enforcement provisions,” urging lawmakers to revisit the statute to strengthen protections and close loopholes. The organization’s position reflects a broader concern that, while the law signals political recognition of surveillance pricing risks, it may fall short of delivering substantive constraints on industry practices.
Industry response has been comparatively measured. Instacart, which faced scrutiny following a prior Consumer Reports investigation into differential pricing, stated that it supports the principle that prices should not be personalized based on individual data and indicated it no longer uses technology enabling such practices.
The larger policy implication is that Maryland’s law may serve as both a catalyst and a cautionary template. While it establishes an initial regulatory framework for addressing surveillance pricing in essential retail, critics warn that its perceived weaknesses could be replicated in other jurisdictions. In the absence of comprehensive federal rules, the trajectory of surveillance pricing regulation in the U.S. is likely to be shaped by this evolving state-level patchwork.
