Surveillance Pricing Fight: State Senate Debates Bill Banning Retailers From Using AI to Set Prices Based on a Buyer’s Profile

July 20, 2026

California Assemblymember Chris Ward has introduced legislation to ban surveillance pricing, a practice where companies use personal data and algorithms to charge different customers different prices for identical products. The bill, AB 2564, has advanced through committee votes and aims to address concerns that the practice disproportionately harms Black and lower-income communities by charging them higher prices based on demographic data and ZIP codes. Opponents, including tech industry groups and some legislators, argue the bill is too broad, would eliminate beneficial personalized discounts, and expose businesses to excessive litigation.

Who is affected

Black Californians and non-white communities (who face higher costs due to algorithmic pricing based on ZIP codes and demographics)
California consumers across the state
Large retailers, grocers, and service providers using surveillance pricing
Small businesses (potentially facing litigation risks)
Families relying on targeted digital coupons and discounts
Communities with fewer shopping resources or options

What action is being taken

AB 2564 is moving through the California legislative process (passed Senate committee with 5-2 vote on June 22, re-referred to Committee on Judiciary, and passed Assembly with 42-21 vote on May 27)
Large corporations are collecting consumer data from cell phones and home computers to determine individualized pricing
The Electronic Frontier Foundation and Consumer Reports are actively supporting the legislation
The Chamber of Progress and other tech industry associations are lobbying against the bill

Why it matters

This matters because surveillance pricing creates economic inequality by charging different people different prices—sometimes up to 23% higher—for identical products at the same time and store. The practice particularly impacts Black and lower-income communities who may already have limited shopping options, essentially holding them "captive" to higher prices based on their demographic data and location. The variations can significantly add up over time, affecting family budgets and perpetuating systemic economic disparities. The issue also represents a broader debate about consumer privacy, corporate accountability, and whether algorithmic decision-making should be regulated to ensure equal treatment.

What's next

AB 2564 will be considered by the Senate Committee on Judiciary
Fifteen other states (Arizona, Georgia, Hawaii, Illinois, Kentucky, Louisiana, Massachusetts, Minnesota, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Texas, and Vermont) are considering similar legislation
Ward states he will continue pushing for the bill's passage at the state level since he does not expect the Federal Trade Commission to take action under the Trump Administration

Read full article from source: The San Diego Voice & Viewpoint