Maryland Leads the Way in Data Privacy Legislation
Maryland is positioned to become the first state in the U.S. to explicitly ban the practice known as "surveillance pricing." The legislation, formally titled the Protection From Predatory Pricing Act, has passed the state legislature and is currently awaiting approval from Governor Wes Moore.
What is Surveillance Pricing?
The practice involves companies utilizing a consumer's personal data—ranging from browsing history and location to purchasing habits—to calculate individualized prices. This means that depending on their digital profile, one customer could pay more than another for the exact same product at the same retailer.
The new legislation targets food retailers and third-party delivery services, classifying the use of such personalized pricing strategies as deceptive trade practices. Violations could result in lawsuits and fines.
Governor's Support and Consumer Concerns
Governor Moore, who initially proposed the measure, stressed the importance of protecting residents from rising costs driven by new technologies. He emphasized that Marylanders need assurance that the price they see is the price they will pay, particularly as families face increasing financial pressures.
While the move has been largely welcomed, the non-profit organization Consumer Reports has pointed out potential limitations. Although they found the legislation encouraging, they noted that the final text contains exemptions that might leave consumers vulnerable.
Identified Loopholes
Specifically, the ban applies only when personal data is used to set prices higher than a baseline, without establishing what that standard price is. Additionally, pricing differences stemming from loyalty programs, memberships, or subscription services are exempt from the ban.
Consumer Reports has encouraged other states considering similar measures to draft laws with stronger safeguards to avoid these specific loopholes.
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