Travel pricing enters the AI transparency era

New York’s disclosure law reshapes how personalized prices are presented to travelers

New York has enacted the first U.S. law requiring businesses to disclose when artificial intelligence and personal data are used to set individual prices. The law aims to bring transparency to so-called personalized or surveillance pricing, where algorithms tailor prices based on consumer data such as browsing behavior, device type, or purchase history.

While the practice itself remains legal, the disclosure requirement seeks to address concerns about fairness, information asymmetry, and consumer awareness. The law has survived an initial legal challenge and may influence similar efforts in other states.

Key takeaways

• Mandatory pricing disclosures: Businesses in New York must clearly notify consumers when personal data and algorithms influence the price shown.
• Scope of personalized pricing: AI-driven pricing can incorporate data such as browsing history, location, device type, and loyalty status to individualize prices.
• Consumer protection rationale: The law is designed to reduce information asymmetry by signaling when prices are personalized rather than uniform.
• Legal validation: A federal judge upheld the statute, ruling that the disclosure requirement is factual and serves a legitimate consumer-protection purpose.
• Retail industry concerns: Retail groups argue the law mischaracterizes long-standing pricing practices and may interfere with customer experience.
• Limits and exemptions: Certain sectors and pricing methods, including some ride-hailing, financial products, and subscriptions, are excluded from disclosure requirements.
• Potential ripple effects: The law establishes a blueprint for other states and could eventually contribute to a patchwork of regulations or a federal standard.

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