After CR’s report, Instacart said it would stop using the software that enabled the pricing tactics, and the Federal Trade Commission and the attorneys general of California and New York opened their own investigations.
The Maryland law, which will go into effect Oct. 1, will prohibit grocery stores from using customers’ personal data to increase individual prices. The law will be enforced by the state’s attorney general, with fines of up to $10,000 for a first offense and up to $25,000 for repeat violations.
“People deserve to know that the price they pay is not different from the customer who walked in just before them, or different from the customer who walks in right after them,” Moore said at Tuesday’s bill signing ceremony. “People deserve to know that their data will not be used against them to charge them more.”
Moore testified for the Protection from Predatory Pricing Act in two legislative hearings, arguing that grocery retailers and delivery apps were using customer data to engage in “price manipulation,” calling the tactics “exploitation” and saying that Marylanders were “getting hosed because of it.”
Grocery and retail industry trade groups, led by the Maryland Retailers Alliance, strongly opposed the bill as initially written and worked with the governor’s office and state legislators to add nine exemptions to the personalized pricing ban. The goal, according to Cailey Locklair, the trade group’s president, was to craft a bill that retailers could comply with while leaving their existing loyalty programs and discount programs in place. “Our customers love discounts,” Locklair said, adding that any egregious or misleading price changes were already prohibited under Maryland’s existing consumer protection law.
Three nonprofit consumer advocacy groups, the American Economic Liberties Project, Tech Equity Action, and Towards Justice, had called on Moore to veto the legislation entirely, arguing that its provisions had been “gutted by industry-friendly definitions,” leaving “gaping loopholes.” A spokesperson for the United Food and Commercial Workers International Union, which also called for a veto, said that Maryland lawmakers “came up short in their efforts to shield customers and workers from predatory pricing at the grocery store.”
Consumer Reports declined to endorse the Maryland legislation, said Grace Gedye, a CR senior policy analyst who has testified about several state personalized pricing bills.
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