Maryland is making history as the first state in the United States to take legal action against dynamic pricing, the practice in which businesses adjust a product’s price based on real-time demand. On April 28, 2026, Governor Wes Moore signed the Protection From Predatory Pricing Act (HB 895) into law, officially prohibiting retailers from “using consumer personal data to set a price for consumer goods or services.” The law will go into effect on Oct. 1 this year and will ban the practice of manipulating prices based on private data collected from users.
Dynamic pricing has been a long-debated topic in American discourse, with surveillance pricing specifically being especially contentious in recent years with the rise of AI. Modern dynamic pricing has existed since the 1980s in the United States when airlines began adjusting prices for tickets in real time based on demand. With the creation of the internet, dynamic pricing became easier for companies who could use web tools such as cookies to save user data, using that information to adjust prices accordingly. In the past few years, companies have become increasingly comfortable with tracking user data, with companies like Instacart using an AI-powered algorithm to decide how to adjust the price. In 2025, a report from Consumer Reports concluded that grocery store prices could differ by as much as 23% between customers.
The increased usage of surveillance pricing has sparked significant controversy, with the FTC launching an investigation on eight companies in 2024 to gain an increased understanding of how surveillance pricing affects consumers. “Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing,” said former FTC chair Lina M. Khan.
Freshman Benjamin Vacatello held a similar position, pointing out the positive impact that the ban could have on consumer protections. “Surveillance pricing makes it harder for the consumer to have the product that they want,” he said. “It is inherently unfair because of how it takes advantage of people.”
Josephine De La Oliva, a mathematics teacher, also had concerns about the implications around the utilization of customer data for profit. “There’s a privacy issue. I think there’s almost like a criteria that’s not being shared as well. So it’s like privacy and how we’re being ranked. We don’t have control over pricing; we don’t know how they’re judging us,” she said.
However, there have also been many defenses of surveillance pricing, with some economists arguing that surveillance pricing could actually lower consumer costs. Jidong Zhou, a professor of economics at Yale University, found in a study that surveillance pricing encourages companies to lower prices to get the interest of consumers in certain occasions, leading to more money being saved overall in consumer spending. However, he still acknowledged that such results only work in certain market conditions. Surveillance pricing remains a slippery slope that requires a nuanced approach to handle.
Rick F. Mui, a candidate for Montgomery County Council District 3 and Richard Montgomery parent, agreed that there were nuances as to how dynamic pricing is used. “Dynamic pricing has been used throughout the commercial sector to optimize revenue during peak hours [and] help alleviate congestion by pushing decision making to off peak hours … [However,] there should not be dynamic pricing for certain line items, such as medical procedures, healthcare, or safety,” he said. He also acknowledged potential issues in the data that is being used to adjust prices. “Dynamic pricing [could] be based on a race, gender, or culture … [leading to] discriminatory pricing.”
Due to challenges and loopholes, Maryland remains the only state to have successfully passed a ban on surveillance pricing. However, the initiative is now on other states as to how they go about the issue, with Maryland setting a potential precedent for other states to follow. Legislation has already been passed in states like Colorado to restrict surveillance pricing in those states as well. Despite Maryland’s successful bill, dynamic pricing remains a national issue that requires close attention in order to solve.
“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,” said Governor Wes Moore in the Maryland General Assembly.
