Seattle Bans Grocery Stores From Using A.I. to Set Prices

Seattle has drawn a line around grocery pricing, and the city says algorithms crossed it. The city council voted 7 to 2 to ban so-called surveillance pricing in grocery retail, making Seattle the first U.S. city to stop stores from using A.I. and personal data to set individual prices.

The new Fair Pricing and Transparency Act is aimed at a very specific trick: using what a shopper looks at, where they are, or what they might be able to pay to decide the price they see. Consumer Reports says the kinds of data involved can include browsing history, real-time location, inferred income, family size and health conditions. KOMO News reports that social media activity and even chatbot conversations are also barred as pricing inputs.

The rule covers large grocery retailers, both online and in physical stores. Traditional coupons and clear-cut discounts, like deals for seniors or veterans, can stay. But stores will have to be more open about how those discounts work. Seattle has not yet said when the law will start or what the penalties will be.

The push didn’t come out of nowhere. Consumer Reports found that on Instacart, shoppers were shown different prices for identical products from the same store at the same time, with gaps as high as 23 percent on some items. The group says that kind of spread could add more than $1,200 a year to a family’s bill. It also points to similar price swings at Uber and Lyft, and to one Kroger customer who asked for their stored data and got a 62-page profile with estimates of income, family size, education and gender.

Seattle is not the first place to act, but it is the first to go this hard at grocery retail. Maryland, Connecticut and New Jersey have already signed bans on surveillance pricing into law. Seattle’s move came with Mayor Katie Wilson and the city council, though media reports say her formal signature is still pending.