Republican lawmakers and business groups are raising concerns about a New Jersey bill that would ban businesses from using consumers’ personal data to set individualized prices, arguing it could have unintended effects on grocery and retail loyalty programs.
A consumer privacy bill advancing through the New Jersey Legislature has sparked debate over whether it could affect the loyalty programs millions of shoppers use at grocery stores, pharmacies, and major retailers.
Assemblywoman Victoria Flynn criticized the proposal Wednesday, saying testimony from industry representatives suggested the legislation could make it more difficult for businesses to operate customer rewards programs that offer discounts.
“At a time when families are already struggling with the high cost of living, New Jersey should be protecting opportunities to save money,” Flynn wrote in a social media post. “The Democrats seem doomed to do the opposite.”
Bill targets personalized pricing
The legislation, sponsored by Senate President Nicholas Scutari, Sen. Joseph Cryan, and Sen. Joseph Lagana, would prohibit businesses from using consumers’ personal data to determine or vary prices for merchandise or services.
The bill specifically targets practices described as “personalized algorithmic pricing” and “surveillance pricing,” which use information such as consumer behavior, location data, biometric information, or other personal data to generate individualized prices.
Violations would be enforced under New Jersey’s Consumer Fraud Act.
Loyalty programs specifically exempted
While opponents have expressed concern about the legislation’s potential impact on retailer rewards programs, the bill includes language stating that it “shall not prohibit any business entity from providing consumers a discount, promotional price, or loyalty program benefit.”
Supporters have said the measure is intended to prevent companies from charging different prices based on personal information collected about consumers rather than banning traditional rewards programs.
Flynn argued that industry testimony raised questions about whether businesses could still operate existing discount programs without legal uncertainty.
“If you value the savings you receive through grocery and retail loyalty programs, now is the time to speak up,” Flynn wrote.
Debate expected to continue
The proposal comes as lawmakers nationwide examine the growing use of artificial intelligence and consumer data in retail pricing.
Business organizations and retailers are expected to continue weighing in as the legislation moves through the legislative process.
It is unclear whether lawmakers will amend the bill before any final votes.
Key Points
- A New Jersey bill would prohibit businesses from using consumers’ personal data to set individualized prices.
- Republican lawmakers argue the proposal could have unintended consequences for retail loyalty programs.
- The bill expressly states it does not prohibit businesses from offering discounts, promotional pricing, or loyalty program benefits.
