Connecticut Becomes Second State to Ban Surveillance Pricing

✴︎

6.10.2026

Quick Facts

Connecticut Governor Ned Lamont signed HB 5563 on June 4, banning surveillance pricing practices starting July 1, 2027
Retailers must display warning ‘THIS PRICE WAS INCREASED BY A PRICE SETTING DEVICE USING YOUR PERSONAL DATA’ when algorithms raise prices based on personal data
Consumer Reports found Instacart’s pricing experiments varied costs by up to 23% for identical products, potentially costing families $1,200 annually

Connecticut became the second state to regulate surveillance pricing when Governor Ned Lamont signed HB 5563 into law on June 4. The legislation takes effect July 1, 2027, following Maryland’s groundbreaking ban enacted in April.

The law prohibits retailers and third-party delivery services from using personal data to set customized prices for individual consumers. Companies that use automated pricing systems must display a disclosure warning: ‘THIS PRICE WAS INCREASED BY A PRICE SETTING DEVICE USING YOUR PERSONAL DATA.’

The legislation targets what experts call surveillance pricing, which differs from standard dynamic pricing. ‘The cleanest way to separate them is dynamic pricing reacts to the market, and surveillance pricing reacts to you,’ said John Andrews, Alex Lee Professor of Business at Lenoir-Rhyne University.

Recent investigations reveal the scope of personalized pricing. Consumer Reports found that Instacart’s algorithmic pricing experiments affected three-quarters of products checked, with identical items priced differently for different customers by as much as 23%. The practice occurred across major retailers including Albertsons, Costco, Kroger, Safeway, Sprouts Farmers Market, and Target.

The price variations could cost a family of four up to $1,200 annually in higher grocery bills, according to Consumer Reports estimates. Some products carried as many as five different prices simultaneously, with variations ranging from 7 cents to $2.56 per item.

Connecticut’s law includes exemptions for customer retention discounts, legitimate business cost differences such as delivery fees, and broadly available discount programs. However, Consumer Reports senior policy analyst Grace Gedye noted concerns about potential loopholes.

‘Businesses may feel it permits personalized pricing so long as they increase list prices and then offer personalized discounts to certain consumers based on their perceived willingness to pay,’ Gedye said.

The Connecticut Business & Industry Association expressed concerns about compliance burdens. VP Chris Davis warned that ‘companies remain concerned that several provisions still represent a significant compliance burden.’

Violations will be enforced by the state attorney general as unfair trade practices. Data broker violations carry penalties up to $200 per day, per consumer, for each violation.

The movement against surveillance pricing is gaining momentum nationwide. Since early 2026, at least 40 bills targeting personalized algorithmic pricing have been introduced in 24 states. New York’s legislature recently passed the One Fair Price Act, which awaits Governor Hochul’s signature.

However, Colorado Governor Jared Polis vetoed similar legislation on June 2, citing concerns about ‘discouraging perfectly acceptable uses of technology to set an appropriate price or wage.’