AB 446 Will Now Be Heard By the CA Assembly Judiciary Committee
Los Angeles, CA—California’s landmark bill regulating surveillance pricing, AB 446 (Ward), advanced out of the Assembly Committee on Privacy and Consumer Protection this afternoon by a vote of 10-2.
The bill, proposed by Assemblymember Chris Ward and co-sponsored by Consumer Watchdog and the United Food and Commercial Workers Western States Council, now heads to the Judiciary Committee.
In an era of mass surveillance and rapidly accelerating AI and algorithms, AB 446 prohibits businesses from using personal information of a consumer to adjust the price of goods based off personal information, according to Consumer Watchdog. Despite California having the strongest data privacy laws in America, there is nothing stopping companies from using personal data to set prices, said the nonprofit.
Last year, Consumer Watchdog outlined examples of surveillance pricing in a report titled “Surveillance Price Gouging.” Companies are trying to read people’s minds and anticipate how bad they want a product and how much they are willing to pay for it, based on scrolling habits and geolocation. Despite Consumer Watchdog requesting identical rides with the same origin and destination, and the same distance and route traveled, one rider was charged $5 more on Lyft than the other person using Lyft. There shouldn’t be a reason for that, and it’s unclear why, said the nonprofit.
The Federal Trade Commission in the final days of the Biden Administrations said surveillance pricing does happen, but the FTC appears to have bailed on the issue. The California legislature has an opportunity to address surveillance pricing, said Consumer Watchdog.
“Companies are using our data against us,” said Consumer Watchdog President Jamie Court. “We need a law that says, ‘If you have one product, you have one price.'”
Such a law is especially important during a time when grocery prices have increased, the data collected on us is incredibly detailed, and the unprecedented nature of corporate algorithms and AI, said Consumer Watchdog.
“Today retailers are putting more and more effort into knowing everything they can about their buyers,” said Kristin Heidelbach, Legislative Director at UFCW. “They have the data, they have the algorithms, and the infrastructure.
“If a company knows you get paid on a Friday, they might raise the price of bread on you by 50 cents,” she added.
The bill proposes an outright ban on surveillance pricing, defining it as “when a person sets a price offered to a consumer based, in whole or in part, upon personally identifiable information gathered through an electronic surveillance technology, including electronic shelving labels.”
It seeks to bar companies from using race, religion, residence, sexuality, political interests, web browsing and purchase history, financial circumstances, and consumer behaviors in setting prices.
“It is about preventing a new form of digital exploitation,” Ward told committee members.
The bill will include amendments that will allow for loyalty programs and discounts for specific groups, such as teachers, active service members, and senior citizens.
Some committee members expressed concerns about California’s top data privacy law, the California Consumer Privacy Act (CCPA), and how it may or not conflict with this proposed bill. Consumer Watchdog believes the CCPA, while giving people more control over their data, contains a loophole that allows companies to charge different prices based on their data. The law’s intent was to provide people a discount or incentive for providing data to a business, but it does not bar using data against the person they took it from.
View a short Consumer Alert video on surveillance practice here.
