Judge Upholds NY Law Requiring Disclosure of Algorithmic Pricing

By Ken Macon

A federal judge has dismissed a legal challenge from the National Retail Federation (NRF) against a New York law requiring businesses to alert customers when personal data is used to determine prices.

The decision supports efforts to bring more transparency to a growing practice known as surveillance pricing.

The NRF, which represents some of the largest retail chains in the country, argued that the law violates First Amendment protections by forcing companies to make disclosures they believe mischaracterize their pricing methods.

However, US District Judge Jed Rakoff ruled that the law is consistent with the state’s interest in helping consumers understand how prices are set.

Known as the Algorithmic Pricing Disclosure Act, the measure requires retailers to inform shoppers in capital letters if algorithms relying on personal data have played a role in setting a product’s price.