Lawmakers in the US state of New York have passed a bill that would prohibit businesses from using consumer data to power algorithm-driven personalised pricing.

The One Fair Price Act would change section 349-a of the state's General Business Law and address what it describes as "surveillance pricing", under which algorithms use personal data to show various prices to different consumers for the same goods or services.

According to the bill description provided by lawmakers, online platforms collect thousands of data points on users, including purchase histories, pay cycle patterns and behavioural indicators such as the length of time a cursor remains over a product.

Those data points are used by pricing systems that update continuously to determine the highest price a particular consumer is likely to pay at a given time.

The measure contains carve-outs for several existing discount models, including loyalty programmes, coupons, subscribe-and-save arrangements, and promotional categories, including veterans and senior citizens.

Those exemptions would apply when discounts are made available on a uniform basis to consumers meeting clearly disclosed eligibility requirements.

Also excluded are regulated insurance entities, creditworthiness assessments, and pricing set under federal or state law.

If dynamic pricing systems change prices more than once within 24 hours, businesses would have to disclose that practice, how often prices change, and the conditions behind those changes.

The state Attorney General would be able to seek civil enforcement measures, including injunctions, restitution and damages.

New York Attorney General Letitia James said: “When this bill becomes law, shoppers will be able to trust that the price they are paying is a fair price, not one dictated by their web browsing history, income, race, or zip code.”

Under the bill, penalties could be as high as $10,000 for the first violation and $25,000 for each subsequent violation.

The legislation would also ban the collection, sale, retention or disclosure of personal data for the purpose of supporting surveillance pricing.

Lawmakers referred to a Consumer Reports study concerning Instacart's AI-enabled pricing model.

They said the study found that the model increased grocery costs by up to 23%.

Lawmakers also cited a US Federal Trade Commission report published in 2025 on the use of location data, browsing history and other personal information to determine individualised prices.

The legislation is set to take effect 180 days after enactment, and rulemaking would be allowed before that date.