Surveillance Pricing Update: California’s Sweeping AB 2564 Passes Assembly and Heads to Senate

On May 27, 2026, the California State Assembly advanced AB 2564, which would prohibit surveillance pricing by retailers. Assemblymember Christopher Ward originally introduced AB 2564 on February 20, 2026, to “ensure that people are not being unfairly charged higher prices due to their actual or perceived characteristics.”

If the bill passes the state senate and is signed into law by Governor Gavin Newsom, the law will prohibit surveillance pricing that uses consumer personal data — such as browsing history, location, income, or demographic data — rather than market forces to set prices or discounts.

Surveillance pricing has become increasingly common and has drawn multiple critiques. Critics argue it allows retailers to exploit consumers by setting prices based on characteristics about the consumer. For example, if the data collected suggests that a buyer lives in a more affluent zip code, the retailer may charge the buyer more for a product. Critics further contend that the practice promotes discrimination based on protected class or characteristics. For example, the elderly could be charged more for medication than the young.

In contrast, those who support surveillance pricing focus on the fact that consumers can save money through discounts and incentives offered as a result of surveillance pricing. As it pertains to discounts offered through loyalty programs, they further posit that consumers should have the freedom to choose whether such participation is worth the benefits they receive.

The California bill prohibits nearly all surveillance pricing. It applies to any seller who makes retail sales of any tangible personal property. As a result, it applies to virtually all business sectors engaging in consumer transactions, including grocery stores, physical storefronts, and e-commerce platforms. The bill also does not distinguish between surveillance pricing used to increase prices from that used to decrease prices or offer consumers discounts.  Any use of personalized data to set prices is forbidden. And while the bill preserves loyalty programs, it effectively guts their utility as discounts by forbidding offering discounts to specific consumers based on their shopping patterns, histories, or engagements with the brand or its app. The bill preserves transparently offered discounts provided to all shoppers, all loyalty members, to all who otherwise qualify.

The California State Senate will now consider the bill.

Comparative Analysis: AB 2564 and Similar State Legislation

California is one of several states that have taken legislative action in this area. For example, Maryland signed the Protection From Predatory Pricing Act into law, banning surveillance pricing at grocery stores. The Colorado and Connecticut state legislatures also recently passed bills prohibiting surveillance pricing. In total, four states have enacted some type of surveillance pricing law.

Other states, including Arizona, Georgia, Hawaii, Illinois, Kentucky, Louisiana, Massachusetts, Minnesota, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Texas, and Vermont, are considering similar legislation.

Although states are increasingly addressing the issue of surveillance pricing, the laws are not uniform. California’s AB 2564 is one of the most sweeping and consequential surveillance pricing bills. By comparison, Maryland’s law exempts any pricing associated with loyalty or membership programs. Connecticut’s law contains carveouts for loyalty and rewards programs and discounts. Colorado’s law similarly includes protections for group discounts and loyalty and rewards programs. Rhode Island’s law exempts “price decreases” such as discounts, volume pricing, loyalty rewards, and time-limited offers.

Implications for Businesses

If AB 2564 becomes law, retailers that use algorithmic, data-driven, or personalized pricing systems might want to:

1. Review current pricing practices to identify whether they involve the use of personal data inputs (e.g., browsing history, geolocation, inferred demographic information) to set prices.
2. Review whether the software or pricing algorithm or program you use utilizes surveillance pricing or considers personalized criteria in pricing.
3. Review loyalty and discount programs to ensure they fall within the types of carve-outs contemplated by AB 2564 and analogous state bills (i.e., that the retailer transparently offers discounts and makes them available to any qualifying consumer rather than individually targeting consumers based on personal data profiles).
4. Monitor legislative developments in California’s senate, as well as in Georgia, Illinois, Minnesota, New Jersey, New York, Pennsylvania, Texas, and other active states, as the compliance landscape evolves rapidly.
5. Assess multi-state exposure given the growing divergence in how states are defining and regulating surveillance pricing.

Crowell & Moring will continue to monitor these developments. For further information, please contact our team.