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States pursue bills to ban tech-driven pricing practices

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19 states consider limiting third-party software for

rental

pricing

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Concerns over data-driven pricing affecting consumer costs

By Jody Godoy

Nov 21 (Reuters) - Even as the White House seeks to roll

back state laws on artificial intelligence, states are pursuing

an increasing number of bills to ban tech-driven pricing

practices in an effort to bring consumers relief from high

costs.

By taking on these practices, states are building on the work of

former FTC Chair Lina Khan, and others, who sought to use

regulation and lawsuits to curb practices they called unfair to

shoppers, workers and renters.

"Even as the federal government backslides, states are

stepping up," said Khan, now a co-chair of New York City

Mayor-elect Zohran Mamdani's transition team.

States are acting as U.S. President Donald Trump considers an

executive order that would seek to preempt state laws on

artificial intelligence through lawsuits and by withholding

federal funding, according to a draft of the order seen by

Reuters on Wednesday.

New York passed a law in October to keep landlords from

colluding on rental prices using algorithms, and California

passed an even broader ban on algorithmic collusion.

Nineteen states are now considering bills that would limit

how businesses use third-party software that relies on

competitor data to set rental housing prices, according to a new

analysis by the American Economic Liberties Project, a

nonpartisan antimonopoly think tank.

"You can't talk about affordability without understanding how

prices are set. And how prices are set is evolving in real time

with the advent of new tools," said Lee Hepner, senior legal

counsel at AELP.

The effort crosses party lines. Tyler Clancy, a Republican state

representative in Utah, is for example planning to introduce

legislation to give consumers more power over the data companies

collect on individuals and use to set prices.

Harvesting and monetizing such data, which can include

granular detail about shoppers' identities, locations, and

behaviors - such as past purchases, browsing history and media

consumption - has become a core part of the retail business.

Retailers use the information to target advertising and

discounts. But critics are concerned that companies are using

personal information to effectively raise prices to what a

customer is perceived as willing to pay. For example, travel

sites offer shoppers in San Francisco higher prices for the same

hotels than those in Phoenix or Kansas City, according to an

investigative report by SFGate earlier this year. And Delta Air

Lines ( DAL ) triggered congressional scrutiny of its plan to

use AI to help set ticket prices, though the airline has said it

would not be used to set individual prices.

"Ultimately what we are concerned about is different people

paying different prices based on who a company thinks they are,"

said Grace Gedye, a policy analyst at Consumer Reports, a

nonprofit consumer advocacy group.