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As the holiday sales ramped up in late 2025, New York proposed a law that would prohibit retailers from using artificial intelligence and customer data to create personalized pricing on their website during events like Black Friday. The law would require retailers that use personalized pricing to include a disclosure that reads, "This price was set by an algorithm using your personal data."
While the overall sentiment in New York is to regulate how retailers use customer data, the law has been met with scrutiny from both sides. Unsurprisingly, businesses feel the law will "cause confusion" since it's too broad, reported The New York Times. The National Retail Federation attempted to block the rule earlier in 2025, citing the First Amendment, but a federal judge dismissed the challenge.
Meanwhile, customers' rights groups feel it's too narrow and want the practice of personalized pricing to be banned completely. States like California and Washington are currently considering an outright ban on personalized pricing, as it becomes increasingly clear that customer data is being used to create targeted ads and pricing more frequently. Former Federal Trade Commission chair Lina Khan voiced concerns that personalized pricing and other AI-powered marketing tools are going to "fully creep across the economy" well beyond Black Friday, making the law feel even more critical. "This new law shines the light on hidden online pricing tactics that take advantage of consumers," New York Governor Kathy Hochul said in a press release.
How does personalized pricing work?
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Personalized pricing is a practice that utilizes customer shopping data and artificial intelligence to determine pricing tailored to individual consumers. For example, someone who just spent a lot on high-end clothing may see a higher price for a pair of pants during a sales event than a more frugal shopper. Or, someone who just paid for a business class flight may be shown more expensive hotel room options. According to the Federal Trade Commission, retailers can collect not just your location and demographic information, but also track your mouse movements on their webpage. This information is then used to not only promote certain products, but even highlight higher-priced options. Delta announced in August 2025 that it was using personalized pricing for its flights, offering the same flight for different costs depending on who is searching.
Currently, it's impossible to know the full extent to which companies are using personal data to target customers. However, Justin Kloczko, a researcher with the consumer protection nonprofit Consumer Watchdog, told The New York Times that he has seen examples of personalized pricing himself. Uber and Lyft quoted him higher prices to the airport than his wife, who requested rides at the same time for this experiment. Uber spokesperson Ryan Thornton claimed the app only uses geographic information to determine ride demand and pricing. New York's proposed law would aim to shed more light on this practice.
For now, you can attempt to outsmart personalized pricing by using cash — yes, paper money — when shopping in person to avoid a further data trail. You can also clear your browser's cache and use one of the best VPN services to make retailers believe you are from a lower-income area.
