With Lina Khan, the former chair of the Federal Trade Commission, having moved to Tinsel Town —a role she stepped into long ago. Even more recently, she has served as the co-chair of Zohran Mamdani’s NYC mayoral transition team. New York state has passed an ambitious new budget. This $517 billion budget goes further, providing key reforms to rein in businesses’ personalized pricing practices.
The new state budget introduces mandatory disclosure requirements for companies that utilize personal data to set prices for goods and services. Companies are required to notify consumers when their pricing is affected by consumer data as used in algorithms. This is particularly vital if it results in varied pricing for various shoppers. This law is a big deal, with big implications. Specifically, it aims to increase transparency and ultimately shield consumers from predatory pricing tactics.
In an interview with The New York Times, Khan shared her fierce enthusiasm for the new rules. The law will be an “absolutely vital” tool, she stressed, for the federal government. She made the case for these approaches in a time when data-driven pricing strategies are more prevalent than ever before.
“This price was set by an algorithm using your personal data.” – The New York Times
Personalized dynamic pricing goes a step further by directly discriminating against people based on their past shopping behavior. It inevitably leads to much higher fees for people who have already bought expensive things. Opportunity to provide consumer protections Critics point out that this kind of practice can create significant price discrimination and erode public confidence.
Khan celebrated the milestones reached under the new budget. He underscored that much harder work lies ahead to rein in these practices. Her comments reflect a common concern that using personal data to determine prices is inherently unethical. They further warn about the critical need for ongoing regulatory vigilance.
As the mayoral transition continues, Mamdani’s administration will surely focus on consumer protection and transparency in business practices. The new disclosure requirements are an important step in the right direction. They increase competition by providing consumers with the knowledge they need to understand what a given data point is driving their pricing offer.