Holiday shopping is about to change for New Yorkers. The state has introduced a strict new law tackling retailers that use artificial intelligence to set personalized prices. Under this rule companies must disclose when your data influences the cost of goods. It marks a major turning point in the fight for digital consumer privacy.
This legislation comes at a critical time. Retailers are increasingly relying on complex algorithms to maximize profits during peak seasons. If this bill passes it will force companies to admit when they are charging you more based on your spending history. The days of hidden digital price discrimination could be numbered.
The push for transparency in online shopping
The core of this new proposal is simple yet powerful. It demands honesty from digital storefronts. If a retailer uses an algorithm to analyze your personal data and changes the price because of it they must show a warning. The label would clearly state “This price was set by an algorithm using your personal data.” This aims to stop the silent practice where two people see different price tags for the exact same item at the same second.
Governor Kathy Hochul emphasized the need for fairness in a recent press release. She stated that the law shines a light on hidden tactics that take advantage of everyday consumers. The goal is not just to punish companies. It is to give power back to the shopper. When you know a price is rigged against you it changes your buying decision.
Personalized pricing has evolved rapidly. It is no longer just about where you live. The Federal Trade Commission reports that companies now track your mouse movements to guess how desperate you are to buy. They analyze how long you hover over a “buy” button. They look at your past purchases to see if you prefer luxury goods. This data helps them squeeze the maximum amount of money from your wallet.
Here is what companies often track to decide your price:
- Device Type: Mac users sometimes see higher hotel prices than PC users.
- Location: Ordering a ride from a wealthy neighborhood can cost more.
- Browsing History: Frequent visits to a product page signal high interest.
- Spending Habits: Past purchases of premium items categorize you as a “high spender.”
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artificial intelligence personalized pricing warning label on shopping cart
Retailers and advocates clash over new rules
The proposal has sparked a fierce debate between business leaders and consumer rights groups. Retailers argue that the law is messy and confusing. The National Retail Federation (NRF) has been fighting these types of regulations for over a year. In early 2025 the NRF tried to block a similar rule by claiming it violated the First Amendment. They argued that pricing formulas are a form of free speech.
However a federal judge dismissed that challenge. This legal win paved the way for New York to introduce this current crackdown. Businesses claim that broad disclosure rules will scare away customers and complicate their website operations. They fear that seeing a warning label about “personal data” will make shoppers abandon their carts immediately.
On the other side consumer advocates feel the law does not go far enough. Groups like Consumer Watchdog argue that disclosure is only a bandage on a deep wound. They want the practice banned entirely.
“We are seeing a digital divide where loyal customers are punished with higher fees,” says a leading privacy researcher.
States like California and Washington are watching closely. They are considering total bans rather than just warning labels. Former FTC chair Lina Khan has also weighed in on the issue. She warned that without strict laws these AI marketing tools will creep across the entire economy. Her fear is that personalized pricing will move beyond luxury goods and start affecting essentials like groceries and healthcare services.
How algorithms decide what you pay
Many shoppers do not realize how sophisticated these pricing engines have become. It is not a person sitting in a room deciding to charge you more. It is a machine learning model processing millions of data points in milliseconds.
Delta Airlines made headlines in August 2025 when they announced the use of personalized pricing for flights. This means the person sitting next to you might have paid half of what you paid simply because the airline knows you travel for business. The algorithm knows business travelers are less sensitive to price changes than vacationers.
Justin Kloczko is a researcher who tested this theory in the real world. He conducted an experiment with rideshare apps like Uber and Lyft. He and his wife requested rides to the same airport at the exact same time. The result was shocking. The apps quoted him a higher price than his wife.
Uber spokesperson Ryan Thornton denied that personal data drives these variances. He claimed the app only uses geographic demand to set costs. Yet stories like Kloczko’s are becoming common. When algorithms run the show it becomes nearly impossible to prove why you were charged a specific amount. This lack of clarity is exactly what the New York law hopes to fix.
Ways to protect your wallet right now
You do not have to wait for the government to pass a law to protect yourself. There are several strategies you can use today to confuse the algorithms. The goal is to make yourself look like a “low value” target to the AI systems.
The most effective digital method is to hide your location and history.
- Clear Your Cache: Retailers use cookies to remember your interest. Clear them before buying.
- Use a VPN: Set your location to a different city or a lower-income area. This can trigger lower regional pricing.
- Compare Browsers: Check prices on your phone and your laptop. Often the mobile app has a different price than the desktop site.
There is also a low-tech solution. Cash is still king when it comes to privacy. Using paper money in physical stores creates zero digital trail. It prevents companies from linking that purchase to your online profile. While you cannot use cash on Amazon buying in person prevents your data from being harvested for future exploitation.
As technology advances the methods to track us will only get smarter. Consumers must stay vigilant. New York’s proposed law is a strong first step but it is likely just the beginning of a long war over who owns the rights to your wallet.
