New York Puts Businesses on Notice for Algorithmic Pricing 

A new law, the Algorithmic Pricing Disclosure Act, took effect in New York and is already drawing scrutiny from the state’s attorney general. According to a recent client alert from law firm Duane Morris, any company that uses an algorithm powered by personal data to set prices for consumers in New York must now display a clear, specific warning. The required language leaves no room for interpretation: “THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA.”

The law targets what it calls “personalized algorithmic pricing.” Duane Morris explains that this means dynamic pricing when those prices are driven by data tied to a specific person or device. That’s a crucial distinction. A company can still use algorithms based on broad market forces like supply and demand without triggering the law. Only when the algorithm reaches into your personal data does the disclosure requirement kick in.

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The required notice cannot be buried in fine print. Per the statute, it must appear “in the same medium as, and provided on, at, or near and contemporaneous with every advertisement, display, image, offer or announcement of a price.” In plain terms, it has to be right there, where you can see it, when you see the price.

Not every industry is covered. Insurance companies and regulated financial institutions are exempt. There is also a carve-out for subscription-based services offering existing customers a deal that’s better than what’s in their current contract. And ride-hailing apps like Uber and Lyft will not face issues from location data specifically. The law excludes that use case, which is fundamental to how those services operate.

Enforcement sits with New York Attorney General Letitia James, and her office has made clear it plans to act. Before going to court, the AG must send a cease-and-desist letter giving a company a chance to fix the problem. But if a company ignores it, the penalties can add up fast.. Fines reach up to $1,000 per violation and as Duane Morris warns, the law does not define what counts as a single violation. That ambiguity could expose companies to enormous financial risk if they’re found to be non-compliant at scale.

James’s office is not waiting around to make use of the statute. In January 2026, shortly after the law took effect, it sent a letter to Instacart requesting details about what the AG called “substantial price variations among shoppers.” That move signals active investigation, not just passive monitoring.

Duane Morris advises companies to take three immediate steps: figure out whether their pricing qualifies as personalized algorithmic pricing under the law; identify every place where individualized prices appear to consumers; and add the required disclosure wherever those prices show up.

The Instacart inquiry is likely just the beginning. With the attorney general’s office already in motion and a consumer complaint hotline in place, more enforcement actions appear to be on the way. Companies selling to New York consumers, whether online or in person, should treat this law as live, not theoretical.