New Jersey Proposes Sweeping Ban on Data-Driven Pricing

Overview

The New Jersey Legislature is considering two bills, that if enacted, would prohibit business entities from using either consumers' personal data or “personalized algorithmic pricing” to set prices for merchandise or services, including groceries. If enacted, the new laws would have broad implications for companies across industries that rely on algorithmic or data-informed pricing strategies. In her recent State Budget Address, New Jersey Governor Mikie Sherrill pledged to sign the proposals into law if they reach her desk.

What the Bills Prohibit

First, New Jersey Senate Bill 3612 (S3612) would make it unlawful under New Jersey's Consumer Fraud Act (P.L.1960, c.39) to use personalized algorithmic pricing, surveillance pricing, or any pricing strategy that determines or varies the sale price of merchandise or services based, in whole or in part, on a consumer's personal data — including biometric data, genetic information, and protected class data.

Second, New Jersey Senate Bill 3732 (S3732) would make it unlawful for retail grocers or third-party grocery delivery platforms to use “dynamic pricing, surveillance pricing, or personalized algorithmic pricing” in the sale of groceries.

These proposals target personalized pricing or surveillance pricing, which, generally speaking, use AI algorithms to price merchandise or services using a consumer’s personal data. That data is, in turn, collected through electronic surveillance technology — including sensors, cameras, device tracking, biometric monitoring, and other forms of observation or data collection capable of gathering information about a consumer's behavior, characteristics, location, and other personal attributes.

The New Jersey laws broadly define “personal data”, defining it to mean any data that identifies or could reasonably be linked with a consumer or his/her/their device. This could include ISP address, zip code, shopping history, browsing history, gender, family and marital status. Its specific inclusion of biometric data — defined to include data generated by automatic or technological processing, measurements, or analysis of a consumer's biological, physical, or behavioral characteristics — means that the law's reach extends well beyond just e-commerce and e-tail channels. This definition encompasses a broad range of identifiers, including fingerprint, voiceprint, eye retinas, irises, facial mapping, facial geometry, facial templates, and other unique biological, physical, or behavioral patterns.

What Is Permitted

The focus of the bills appears to seek to prevent the setting of higher prices for some customers, as opposed to others, or upwardly adjusting the price of a product based on a customer’s perceived willingness to pay. While neither bill expressly prohibits businesses from providing consumers with discounts, promotional prices, or loyalty program benefits, businesses that offer such programs should nonetheless carefully assess whether they could be characterized as varying prices based on individual consumer data. If they do, these practices could fall within the bills’ ambit.

Enforcement and Penalties

A violation of either proposal constitutes an unlawful practice under New Jersey's Consumer Fraud Act, punishable by a monetary penalty of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense. In addition, violations may result in cease-and-desist orders issued by the Attorney General, the assessment of punitive damages, and the awarding of treble damages and costs to the injured party.

Additional Enforcement Mechanism

Each proposal permits the Director of the Division of Consumer Affairs, an agency within the Attorney General’s purview, to take anticipatory administrative action in advance as necessary for implementation.

Key Takeaways and Recommended Actions

If enacted, these bills would mark some of the country’s earliest legislative efforts to specifically outlaw personalized pricing and surveillance pricing in the retail or grocery industries, and would constitute far-reaching state-level restrictions on data-driven pricing in the United States.

Companies should consider taking the following steps now:

1. Audit pricing algorithms to determine whether pricing decisions are driven, in whole or in part, by individual consumer data or behavioral profiles.
2. Review data collection practices — particularly those involving device tracking, location data, behavioral analytics, biometric monitoring, or any other form of electronic surveillance — to assess their connection to pricing.
3. Evaluate loyalty and promotional programs to confirm they fall within the bills’ permitted carve-out and are not structured in a manner that effectively personalizes prices based on consumer data.
4. Assess third-party vendor relationships to determine whether pricing tools or services provided by third parties may implicate the bill.
5. Monitor the bills’ legislative progress for any amendments that may alter their scope, and track forthcoming rulemaking by the Division of Consumer Affairs.

While New Jersey may be one of the first states to take moves to expressly, and statutorily, prohibit personalized and surveillance pricing, it is not alone in its focus on these practices. Indeed, over the past six months, state attorneys general across the country have intensified their scrutiny of surveillance pricing practices. In January 2026, California Attorney General Rob Bonta announced an investigative sweep into retailers, grocers, and travel companies suspected of leveraging personal data to adjust prices for individual consumers. Meanwhile, late last year, New York's Algorithmic Pricing Disclosure Act took effect, making it the first enacted statute of its kind in the nation. A growing number of states have also introduced legislation aimed at regulating algorithmic pricing and/or dynamic pricing, including Illinois' HB 3838 and SB 2255, and Texas' SB 2567, among others.

Companies that collect or utilize consumer data in their pricing practices should assess their exposure under these emerging frameworks and consult with counsel accordingly. Crowell's State AG Group will continue to monitor developments in this space and is willing to assist clients in navigating this rapidly evolving regulatory landscape.

This alert is provided for informational purposes only and does not constitute legal advice. Please contact us if you would like to discuss how this legislation may affect your business.