Post by : Meena Ariff

Photo: Reuters

The National Retail Federation has sued New York State over a new law that will force shops to tell customers if they use their data to set prices. This method is called “surveillance pricing.”

The lawsuit was filed on Wednesday, July 2, 2025. The National Retail Federation is the world’s largest retail trade group. They believe the new law breaks their members’ First Amendment rights, which protect free speech.

The Algorithmic Pricing Disclosure Act will start on July 8. Governor Kathy Hochul signed it in May. She said that charging different prices based on what customers are willing to pay is unfair because it stops people from comparing prices properly.

The law says shops must show clear warnings if they use algorithms linked to customer data to set prices. But the retailers argue that these warnings are “misleading and scary.” They believe it will make customers think badly of them even though shops often use these systems to give discounts and rewards to loyal buyers.

The retailers also said the law is based on “fear” of price cheating. They explained that algorithms often help lower prices for many customers.
If retailers don’t follow the law, they could be fined $1,000 for each violation.

The only person named in the lawsuit is State Attorney General Letitia James, who enforces laws in New York. Her office and Governor Hochul’s office did not reply to questions immediately.

Earlier in January, the Federal Trade Commission released a study saying that using personal data and browsing history can let shops charge different people different prices for the same item. However, FTC Chairman Andrew Ferguson disagreed with releasing the study so quickly before the change in US presidents. He said it was done to meet a political deadline.

The final decision by the court will decide if New York can move forward with this first-of-its-kind law in the country or not.