AB 446 Stops Businesses From Charging More Based on Personal Data
LOS ANGELES, July 16, 2025 /PRNewswire/ — California’s bill regulating surveillance pricing, AB 446 (Ward), moves to the Senate Appropriations Committee after passing the Senate Judiciary Committee late yesterday by a vote of 10 to 2.
“Every person has a price,” said Justin Kloczko, tech and privacy advocate for Consumer Watchdog. “Based on mountains of personal data, companies are determining the highest price people are willing to pay for something, and charging accordingly. That wasn’t the case just a few years ago. AB 446 will stop this.”
Yes votes: Umberg, Allen, Arreguín, Caballero, Durazo, Laird, Stern, Wahab, Weber Pierson, Weiner
No votes: Niello, Valladares
Not voting: Ashby
AB 446, introduced by Assemblymember Chris Ward, is co-sponsored by Consumer Watchdog and the United Food and Commercial Workers Western States Council (UFCW).
In an era of mass surveillance and rapidly accelerating AI, AB 446 prohibits businesses from using personal information of a consumer to raise the price of goods, said Consumer Watchdog. Despite California having the strongest data privacy laws in America, there is nothing stopping companies from using personal data to set higher prices, said the nonprofit.
The bill defines surveillance pricing as “offering or setting a customized price for a good or service for a specific consumer or group of consumers, based, in whole or in part, on covered information collected through electronic surveillance technology.”
This include data on a “consumer’s behavior, characteristics, location, or other personal attributes, whether in physical or digital environments.”
“We should be doing everything in our power to lower costs,” said Ward. “We believe this existing practice is exploiting some loopholes to charge people based on their data.”
Kristin Heidelbach, legislative director of UFCW, said surveillance pricing is being adopted by Wal-mart, Amazon Fresh and Whole Foods.
“Shifting pricing in real time is not anecdotal,” said Heidelbach.
Last year, Consumer Watchdog outlined examples of pricing algorithms in a report titled “Surveillance Price Gouging.”
Orbitz deployed a pricing algorithm assuming that Mac users were wealthier than non-Mac users, and charged them more for hotel rooms. The price for a backpack on Amazon was $7 more on a shopper’s phone than on their laptop. The Princeton Review charged customers in ZIP Codes with high Asian populations more for tutoring packages. Consumers browsing from the Bay Area were charged higher rates for hotel rooms than those browsing from Kansas City and Phoenix. And despite Consumer Watchdog requesting identical rides with the same origin and destination, and the same distance and route traveled, one rider was charged $5 more on Lyft than the other person using Lyft. There shouldn’t be a reason for that, and it’s unclear why, said the nonprofit.
“Companies are trying to read people’s minds and anticipate how bad they want a product and how much they are willing to pay for it, based on data such as scrolling habits and geolocation,” said Kloczko.
The bill has been amended to clarify exemptions. Examples of when surveillance pricing doesn’t happen include when:
The difference in price is based solely on the costs of providing the service to different consumers.
A discounted price is offered based on publicly disclosed eligibility criteria, like signing up for a mailing list.
A discounted price is offered to members of a group, like teachers, veterans, senior citizens, or students.
A discounted price is offered through a loyalty program that consumers enroll in.
Bill supporters include the American Economic Liberties Project, Consumer Federation of America, EPIC, Consumer Reports, TechEquity, and Privacy Rights Clearinghouse. Those opposed to the bill include the California Chamber of Commerce, the American Advertising Federation, and the California Retailers Association.
The Federal Trade Commission in the final days of the Biden Administrations said surveillance pricing does happen, but the FTC appears to have now bailed on the issue under the Trump FTC, said Consumer Watchdog. California legislators now have an opportunity to address surveillance pricing, said Consumer Watchdog.
“A law regulating surveillance pricing is especially important during a time when grocery prices have increased, the data collected on us is incredibly detailed, and the unprecedented nature of corporate algorithms and AI,” said Kloczko. “This idea that every person has an individual price is a bad one.”
View a short Consumer Alert video on surveillance practice here.
SOURCE Consumer Watchdog
