New Jersey Bans AI Surveillance Pricing in Grocery Stores

New Jersey has become the third U.S. state to outlaw AI-driven surveillance pricing in grocery stores, a practice that uses consumer data to charge shoppers different amounts for the same products.

Governor Mikie Sherrill signed the Fair Price Protection Act into law on Friday, prohibiting grocery retailers and third-party shopping platforms like Instacart from leveraging personal information—including location data, browsing history, cart contents, and purchase records—to dynamically adjust prices for individual customers.

"Surveillance pricing essentially gives Big Brother a look into your shopping cart," Sherrill said. "It's incredibly invasive and expensive."

How surveillance pricing works

The technology enables retailers to set personalized prices based on what algorithms predict each shopper is willing to pay. Two customers standing in the same aisle could see different prices for identical items on their devices, with neither aware of the discrepancy.

A Consumer Reports investigation documented price variations of up to 23 percent for household staples like peanut butter and turkey on a single grocery-delivery platform, depending on the shopper.

Why it matters

Surveillance pricing represents a fundamental shift in retail economics, moving from transparent shelf prices to opaque, algorithm-driven discrimination. As AI systems become more sophisticated at profiling consumers, the practice threatens to erode price transparency and disproportionately burden shoppers with less bargaining power. The legislative response signals growing regulatory concern about AI applications that exploit information asymmetries.

Broader legislative momentum

New Jersey's ban follows similar legislation in two other states, according to Inc. At least 20 additional states are currently considering comparable measures, suggesting surveillance pricing may face a coordinated regulatory crackdown nationwide.

Sherrill framed the issue as both a privacy violation and an economic fairness concern. "New Jersey families are already feeling the pressure of higher costs," she said. "The last thing they need is companies secretly using their personal data to charge them more than someone else for the exact same product."

The governor emphasized that competition should drive better prices for all consumers, not create opportunities for price discrimination. "If businesses want to compete, they should do so by offering better prices, not by finding new ways to squeeze shoppers," she said.

The legislation specifically targets the use of personal data for price differentiation, requiring retailers to maintain consistent pricing regardless of individual customer profiles.

These details were first reported by Kevin Haynes at Inc.