This bill requires businesses to disclose when they use personalized algorithms to set different prices for individuals based on their personal data and grants consumers the right to opt out of such pricing.
Suhas Subramanyam
Representative
VA-10
This bill, the "SLASH Prices Act," requires businesses to disclose when they use personalized algorithms based on consumer data to set individual prices. Consumers must be given a clear, immediate way to opt out of this algorithmic pricing without penalty. The legislation grants the Federal Trade Commission (FTC) authority to enforce these transparency and anti-discrimination requirements.
SLASH Prices Act Mandates Algorithmic Disclosure: Shop With More Transparency Starting Next Year
The 'Shedding Light on Algorithms Setting Higher Prices Act'—or SLASH Prices Act—aims to pull back the curtain on how companies use your personal data to decide what you pay. If a business uses an algorithm to set a unique price just for you based on your browsing history, demographics, or past purchases, they must now place a prominent notice right next to the price tag stating: 'This price was set by an algorithm using your personal data.' Beyond just seeing the label, you’ll have the legal right to opt out of this personalized pricing on the spot. If you do, the business is prohibited from punishing you by raising the price further, lowering the quality of the service, or denying you the sale entirely (Section 2).
The End of Hidden Hikes
Imagine you and your coworker are both looking at the same flight or a new pair of boots online, but you’re seeing a higher price because the site knows you live in a specific zip code or just got a promotion. Under this bill, that site has to come clean. You’ll see the disclosure and a clear way to opt out, showing you exactly what the 'standard' price is compared to your 'personalized' one. This isn't just for online shopping, either; it applies to any person or entity selling goods or services in person as well. The goal is to move away from a 'black box' pricing model where your data is used against your wallet without your knowledge.
What Stays the Same
It is important to note what this bill doesn't change. You’ll still see 'dynamic pricing'—the kind that makes Uber rides more expensive during a rainstorm or flight prices jump because a plane is almost full—as long as those changes are based on market conditions and not your personal identity. It also won't touch your insurance premiums, credit card rates, or those standard discounts for seniors, students, and veterans. Additionally, companies can still use your location to calculate taxes or shipping costs without triggering the disclosure rules. Essentially, the bill targets 'me-pricing' rather than 'market-pricing.'
Enforcement and Accountability
To make sure companies actually follow through, the Federal Trade Commission (FTC) is tasked with setting up a reporting system within a year so you can flag violations directly. The FTC and state attorneys general will have the power to sue companies that hide these disclosures or make it impossible to opt out, treating these failures as 'unfair or deceptive acts.' For businesses, this means a significant shift in how they handle data and pricing displays, as they must also notify the FTC whenever they start or stop using these personalized algorithms. The law is set to take full effect one year after it is signed, giving retailers time to update their software and store signage.