Yet another state makes moves to end dynamic pricing

Source: Mashable Tech

Pennsylvania has become the latest state to propose legislation to fight dynamic pricing.

Pennsylvania Senate Bill 1205

The state’s Senate Bill 1205 would prohibit “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce,” specifically targeting the promotion or use of dynamic pricing. In the bill, dynamic pricing is defined as changing the prices of essential goods or services within a 24‑hour period based on demand or other factors, including the use of artificial intelligence.

What is dynamic pricing?

Dynamic pricing is a practice that has become more common among retailers in recent years. It involves adjusting prices in real time based on variables such as demand, time of day, or customer data.

• Surge pricing – Apps like Uber have long used surge pricing during busier periods.
• Surveillance pricing – Uses customers’ behaviors and characteristics to set different costs for the same items.
• Algorithmic pricing – Relies on data—sometimes generalized (e.g., overall demand) and sometimes personalized (e.g., demographic information)—to determine price.

Recent legislative actions

• New York – In November, the Algorithmic Pricing Disclosure Act went into effect, requiring businesses that use algorithmic pricing to display a clear disclaimer near the price: “THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA.” Source
• Other states considering legislation – Arizona, Florida, Hawaii, Illinois, Kentucky, Nebraska, Oklahoma, Tennessee, Vermont, Virginia, and Washington are among the states exploring laws to curb AI‑driven surveillance pricing. Source

Industry responses

• Instacart – In December, the food‑delivery service ended its controversial price tests after a Consumer Reports investigation revealed that the same products were priced differently for different customers—sometimes by as much as 23 %. Source
• Sony – Despite the scrutiny, Sony continues to experiment with dynamic pricing in its PlayStation Store. Source
• Wendy’s – After backlash, Wendy’s walked back its decision to implement dynamic pricing in 2024. Source