Retail Group Sues New York Over Algorithmic Pricing Disclosure

The National Retail Federation (NRF) is challenging a New York legislative bill that targets the practice of algorithmic, personalized pricing.

In early July, the NRF filed a lawsuit against the state over a bill that would establish the “Preventing Algorithmic Pricing Discrimination Act,” which mandates that retailers notify consumers when prices are set using personal data. Specifically, the bill requires businesses to display the statement: “This price was set by an algorithm using your personal data.”

The NRF argues that the mandated disclosure is not only misleading but also damages consumer trust unnecessarily.

“We don’t think that the warning is factual,” NRF General Counsel Stephanie Martz told Retail Brew in an interview published Tuesday (Aug. 5). “We don’t think it’s accurate, and we think it’s really going to diminish customers’ trust in retail needlessly.”

Martz contended that the proposal carries an implicit judgment that the pricing practice is harmful. The bill is currently before the N.Y. Senate’s Consumer Protection Committee for review.

While the NRF’s suit claims a First Amendment violation — arguing that businesses should not be forced to deliver what they see as a government-mandated opinion — others see the bill as a step toward greater pricing transparency.

The legal battle comes at a time when consumers are already seeking more transparent pricing models as tariffs contribute to higher inflation. Retailers, for their part, are feeling the burn as well, expressing concern over how tariff-related inflation will impact shopper behavior during the upcoming holiday season, among other key spending periods. The NRF has been pushing back against the White House in an effort to mitigate trade-policy-related disruptions.

Recently, Senator Mark Warner challenged Delta Air Lines’ test of surveillance pricing, using consumers data to set prices. Critics, including Warner, argue this practice is anti-consumer and could allow airlines to increase profits by exploiting personal information. On Monday (Aug. 4), the airline pushed back, saying its tool uses aggregated market data to help analysts, not to set individual prices based on personal data.