Maryland outlaws 'predatory pricing,' other states may follow
It's also called "dynamic" or "surveillance" pricing and it is not the consumer's friend
A merchant is someone who displays goods for sale and either posts a set price for each item or offers to negotiate each individual transaction. A predator is someone who secretly and surreptitiously changes the sale price of an item based on what it thinks it knows about each customer.
Being a retailer is OK. Being a predator isn’t, at least in Maryland. Its legislature has passed the Protection from Predatory Pricing Act, and Governor Wes Moore says he will sign it into law. That will make Maryland the first state to outlaw predatory pricing — termed “dynamic” or “surveillance” pricing in the more polite language favored by retailers.
Kroger, Walmart and Lidl are all reported to be using surveillance pricing in at least some of their locations. While supermarkets are fairly new to the game, dynamic pricing is common in many industries, including e-commerce, airlines, ride sharing and event tickets (like Ticketmaster).
Dynamic pricing uses algorithms to adjust prices based on factors like:
Demand (busy times vs. slow periods);
Inventory levels;
Location;
Time of day or season;
Your browsing or purchase history.
It’s widely used by companies like Amazon, Uber, and airlines such as Delta Air Lines. But changing prices in a retail setting is different, consumer advocates argue.
“Marylanders deserve to know that the price they see on the shelf is the price they will pay at the register,” said Gov. Moore in January when the bill was introduced.
“Our Administration is laser-focused on protecting Marylanders from skyrocketing costs. At a time when Marylanders are already stretched by the rising cost of groceries, housing, and everyday necessities, we must ensure that new technologies are not used to drive up the bill for working families,” Moore said.
Civil penalties for violators in Maryland start at $10,000 for a first offense and rise to $25,000 for subsequent violations.
“Personalized pricing”
Some retailers experiment with charging different prices based on:
Device (Mac vs. PC);
Location or ZIP code;
Shopping history.
While not always confirmed publicly, concerns about “digital price discrimination” are growing — especially around companies like Amazon and large data-driven retailers.
Electronic shelf labels
The impetus for predatory pricing is the retail industry’s rapid adoption of electronic shelf labels, which make it simple to change prices “on the fly,” depending on who the customer is, what time it is, what the weather is or other factors that consumers wouldn’t expect to be a legitimate factor in pricing.
Brick-and-mortar retailers welcome electronic shelf labels because they think it gives them a competitive leg up over online merchants, who can easily match prices to fit the profiles they have on their customers.
Remember, each time you use that little “discount” card from a major retailer, it’s one more notch in the merchant’s warehouse of information about you. That data, by the way, is exempt from the Maryland law thanks to vigorous lobbying from the Maryland Retail Alliance.
Consumer Reports lobbied for the bill, but says the final draft of H.B. 895 “falls short of adequately protecting consumers”, thanks to the loyalty card exemption.
Lots of data, much of it wrong
“Retailers have a lot of data about individual shoppers; how often we search for or hover over particular items, whether we live near competitor stores, inferences about our likes and dislikes, our dietary needs, our income, our family size, and more. Surveillance pricing allows companies to take advantage of that information asymmetry and charge you as much as they think you’re individually willing to pay,” said Grace Gedye, senior policy analyst at Consumer Reports (CR).
For instance, one Kroger’s shopper in Oregon requested their data under a state privacy law and received a 62-page profile — and most of the inferences were wrong.
Other states are considering surveillance pricing bans including California, Colorado, Illinois, New Jersey, New York.
Grocery stores are required to keep their prices fixed for at least one business day to prevent hourly price spikes.
Retailers are prohibited from using surveillance data—such as a customer’s shopping habits, ethnicity, or income—to set different prices for different individuals.
What consumers can do
Dynamic pricing isn’t going away — it’s becoming the default. While it can occasionally save consumers money, it more often rewards flexibility and punishes urgency. The result: a marketplace that’s more efficient for companies, but often more complicated and costly for consumers.
There are a few steps you can take to defend yourself:
Track prices over time (use price trackers or alerts);
Shop off-peak when possible;
Compare across platforms before buying;
Clear cookies or use private browsing to reduce personalization signals;
Be cautious about urgency cues (“Only 2 left!” can be algorithmic).
You can also be wary of retailers who use electronic shelf labels. This is rapidly becoming the default but there are still some hold-outs, including Trader Joe’s, which has explicitly taken a low-tech approach compared to other grocery chains:
The company has said “screens in stores are just not things we do” and it avoids investing in in-store tech that could raise costs. It also avoids tracking customer behavior or building data-driven pricing systems, sticking to a simpler retail model, part of its “neighborhood market” ethos. .