H.R. 9371: Shedding Light on Algorithms Setting Higher Prices Act

This bill would require businesses that sell goods or services, either online or in person, to tell customers when a price is being set by an algorithm using that customer’s personal data.

What businesses would have to disclose

If a business uses personalized algorithmic pricing—meaning it uses software and personal data to set a different price for one person than for another for the same product or service—it would have to show a written notice that says: "This price was set by an algorithm using your personal data." The notice would need to be displayed prominently next to the price.

Opt-out rights for consumers

The bill would also require businesses to give customers a way to opt out of personalized algorithmic pricing. If a customer makes an authenticated request to opt out, the business would have to comply right away and tell the customer what price they will be offered after opting out.

Businesses would not be allowed to punish customers for opting out. For example, they could not deny them goods or services, charge them more because they opted out, or give them lower-quality service.

Notice to the Federal Trade Commission

Businesses would have to notify the Federal Trade Commission (FTC) when they start or stop using personalized algorithmic pricing.

What is excluded

The bill would not apply to several types of pricing or services, including:

• Insurance and credit products or services
• Dynamic pricing that does not use personal data
• Discount programs for broadly defined groups such as teachers, service members, seniors, students, and veterans
• Use of location data for ride-sharing or for-hire vehicle fares
• Using location or IP address only to determine the customer’s jurisdiction for things like product availability, currency, taxes, or regulatory compliance
• Price differences based only on delivery distance or delivery time
• Individualized credits, rebates, or discounts offered in response to a complaint, service issue, billing error, or similar customer service matter

Enforcement

The bill would treat violations as unfair or deceptive acts under the Federal Trade Commission Act. That means the FTC could enforce the law using its existing powers. State attorneys general would also be able to bring civil actions to stop violations, seek restitution or damages, and obtain other relief, though they would have to notify the FTC first. If the FTC or U.S. Attorney General has already filed a federal case on the same issue against the same defendant, states could not bring a separate case for the same conduct while that federal case is pending.

Reporting and timing

The FTC would have to create a way for people to report violations within one year after enactment, potentially through the Consumer Sentinel Network. The law would take effect one year after it is enacted.

Relevant Companies

• AMZN — Amazon could be affected if it uses personalized pricing or targeted price optimization in its retail marketplace or other consumer offerings.
• UBER — Uber could be affected in parts of its ride-hailing or delivery businesses where pricing systems use customer data, though some location-based fare practices are exempt.
• LYFT — Lyft could be affected for similar reasons in ride-hailing pricing, subject to the bill’s exemption for geographic-location-based fare calculation.
• ETSY — Etsy could be affected if its marketplace pricing tools use personal data to tailor prices for individual shoppers.
• WMT — Walmart could be affected if it uses personalized pricing in online or in-store promotions or checkout pricing systems.
• TGT — Target could be affected if it uses personalized pricing or algorithmic offer systems tied to consumer data.
• EBAY — eBay could be affected if seller or platform pricing tools rely on personal data to set individualized prices.