NJ governor signs price-gouging ban on surveillance

New Jersey Governor Mikie Sherrill signed the Fair Price Protection Act on July 23, blocking retailers from using shoppers’ personal data to set individualized prices. The law also includes a one-year halt on new electronic shelf label (ESL) installations, a measure the National Grocers Association (NGA) had asked her to drop.

The legislation prevents businesses from adjusting prices based on online activity, location, purchase history, or other collected data. Loyalty programs and discounts remain allowed, and current ESL systems can still operate, be repaired, or replaced while the New Jersey Innovation Authority examines the technology.

Sherrill presented the law as a way to protect consumers. She stated that companies should compete by offering better prices rather than exploiting personal data to charge more. Attorney General Jennifer Davenport added that enforcement would ensure grocery prices reflect actual costs, not what algorithms predict a shopper might pay.

The NGA opposed the bill, warning it could create problems for independent grocers. In a July 17 letter, the association requested clarifications on discounts and pricing disclosures, along with the removal of the ESL moratorium. Macy Lemon, NGA’s vice president of state government affairs, said independent grocers use cost-based pricing and promotions, not algorithmic adjustments.

Lemon argued ESLs improve efficiency by reducing labor costs and food waste. She noted these systems allow quick discount applications. The United Food and Commercial Workers (UFCW) supported the moratorium, calling it a model for other states. Ademola Oyefeso, an international vice president at UFCW, said the law could protect shoppers from AI-driven pricing tactics.

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The law’s sponsors, including State Sen. Joe Cryan, described surveillance pricing as the use of artificial intelligence to set different prices for different customers. Advocacy groups like the New Jersey Institute for Social Justice and New Jersey Citizen Action also backed the measure.

Sherrill has previously targeted algorithmic pricing. Earlier this year, she addressed junk fees and algorithmic rent-setting.

The NGA, representing retail and wholesale community grocers, generates over $557.5 billion in annual economic activity. The moratorium on new ESLs may slow adoption but won’t stop existing systems from functioning. Some grocers say the pause could delay cost-saving improvements, while consumer advocates view it as a necessary limit on data-driven pricing.

The debate over personal data’s role in pricing continues. New Jersey’s law marks one of the first state-level efforts to regulate the practice. The Innovation Authority’s study may influence future policy, but for now, the law remains in effect as a rare intervention in an industry increasingly dependent on data.

Retailers must adapt to the new rules.