By Amara Osei

New York City legislation expected before the Council on Thursday would allow fines of up to $1,000 for every consumer or transaction involved in personalized pricing, which uses algorithms and personal data to charge different prices for identical goods, according to The New York Times.

Council Speaker Julie Menin, the bill’s sponsor, said the votes needed for passage were “comfortably secured.” The Consumer and Worker Protection Committee is scheduled to vote at 11 a.m. ET, with the full Council convening later Thursday, according to amNewYork.

Menin said charging different people different prices for the same products is “unethical and worsens our affordability crisis,” in a statement reported by The New York Times. Mayor Zohran Mamdani supports the proposal, stating that New Yorkers’ personal data should never be used against their own pocketbooks.

What would the bill prohibit?

Introduction 891-A would empower the Department of Consumer and Worker Protection to investigate violations and fine offenders as much as $1,000 for each infraction, according to amNewYork. Every consumer or transaction involved could count as a separate violation, increasing potential penalty exposure for each instance of data-driven price variation.

The measure would also prohibit businesses from gathering, selling or passing personal information to another party for surveillance pricing, defined as the use of consumer data to set individual prices. Together, those provisions would restrict both the collection of personal information for that purpose and the use of algorithms to vary a shopper’s price.

Which discounts would remain lawful?

The bill would preserve several established pricing practices, according to amNewYork.

• Routine sales.
• Coupons.
• Rewards for loyal customers.
• Price breaks for specific categories of people, including veterans and seniors.

Carve-outs would also cover some activities already subject to government regulation, including pricing for insurance and credit. The exceptions preserve the listed discounts while limiting individualized pricing tied to consumer data.

How would enforcement work?

Qualifying small businesses would receive notice of an initial violation and 30 days to demonstrate that they had corrected the problem. The bill would not include the private right of action, meaning a private legal claim, that Department Commissioner Sam Levine had requested.

The bill was revised after a June 17 hearing at which retail, hotel and technology groups warned it could restrict rewards programs and discounts, according to amNewYork. Its effective date moved from 120 days to one year after enactment, providing businesses with more time before implementation.

What stake do restaurants have?

Uber spokesman Josh Gold said: “If enacted, this law will make it harder for small restaurants with limited marketing budgets to reach customers, putting them at a disadvantage against national chains.” The warning focuses on small restaurants’ limited marketing budgets and their ability to reach customers, according to The New York Times.

Uber Eats lets restaurants send targeted discounts based on consumers’ searches and abandoned shopping carts. The proposed ban would not permit that practice, according to The New York Times.

Where are similar bans moving?

The New York State Legislature passed a similar ban, the One Fair Price Act, in June. It remained unsigned by Gov. Kathy Hochul as of Wednesday, according to amNewYork.

Connecticut, Maryland, New Jersey and Seattle have approved similar measures, according to The New York Times. Seattle’s City Council approved its policy in September, targeting large grocery retailers that use artificial intelligence and personal data to set prices for individual shoppers.

Seattle still permits openly advertised loyalty discounts for broad groups, including seniors and veterans, and standard coupons. The New York proposal similarly protects coupons, rewards and category-based breaks, according to amNewYork.

When would a ban take effect?

If the Council approves Introduction 891-A and Mamdani signs it, the ban would take effect one year after enactment, according to amNewYork. The timetable therefore requires an 11 a.m. ET committee vote, a later full-Council vote and the mayor’s signature before the implementation period begins.