Your Data Could Set the Price of Your Eggs
▼ Summary
– A new New York State law requires businesses to disclose when they use personal data in algorithms to set prices, as seen in a notice on Target’s website.
– The law mandates a “clear and conspicuous” disclosure but does not require companies to specify what personal data is used or how it influences the final price.
– Target’s disclosure is not easily found, requiring a customer to click an information icon and scroll, which courts have previously deemed potentially insufficient.
– Target has a history of varying online prices based on a user’s associated store location, citing local market conditions and having settled a related lawsuit in California.
– Price differences for items like eggs and toilet paper are evident on Target’s website, varying by location such as between Rochester and Manhattan or different NYC neighborhoods.
The price you see for everyday items online may no longer be a simple reflection of supply and demand. A new law in New York State is pulling back the curtain on a widespread retail practice: using algorithms and personal data to set dynamic prices for consumers. This means the cost of a carton of eggs or a pack of toilet paper could be influenced by information linked to you or your device, a reality now requiring disclosure on websites like Target’s.
For instance, a shopper near Rochester, New York, might see Target’s Good & Gather eggs listed at $1.99, while a visitor to the site from Manhattan’s Tribeca neighborhood is quoted $2.29 for the identical product. A small notice on the product page, accessible by clicking an information icon, now states, “This price was set by an algorithm using your personal data.” This disclosure is a direct result of the state legislation, which mandates that businesses inform customers when personal data is used to algorithmically determine a price.
The law defines personal data broadly, covering any information that can be linked to a specific consumer or device. However, it does not force companies to detail exactly which data points are used, be it location, browsing history, or purchase patterns, or to explain how each factor influences the final figure. There is a specific exemption for using location data solely to calculate rideshare or taxi fares based on mileage and time, but this allowance does not extend to general retail pricing.
A critical aspect of the regulation is that the notice must be “clear and conspicuous.” Critics might argue that Target’s implementation, hidden behind a clickable icon and at the bottom of a pop-up window, does not fully meet this standard. Legal precedent suggests courts do not always consider it reasonable to expect consumers to seek out “more information” links that are not prominently displayed. Target has not responded to inquiries about the specific reasons for the price variations or what personal data its algorithm utilizes.
This practice of location-based pricing is not new for the retailer. Investigations in 2021 revealed that Target’s online prices shifted based on the store location tied to a user’s account, a strategy the company said reflected “local market” conditions. The following year, Target settled a lawsuit in California where district attorneys alleged the company used geofencing technology to automatically adjust prices shown in its mobile app based on a customer’s physical location. Today, the website continues to automatically associate visitors with a nearby brick-and-mortar store, a setting users can manually change, though the criteria for this automatic selection remain unclear.
The phenomenon extends beyond eggs. The price for a six-pack of Charmin Ultra Strong toilet paper shows a similar discrepancy, listed at $8.69 for a store set in Flushing, Queens, and $8.99 for the Tribeca location. These examples underscore a retail environment where the final price is increasingly personalized and opaque, determined by complex algorithms that weigh a basket of data points unique to each shopper.
(Source: Wired)
