New York's Algorithmic Pricing Disclosure Act Is In Effect

Any company using an algorithm that utilizes personal data to set prices for consumers in New York state must comply with a new statute: the Algorithmic Pricing Disclosure Act, N.Y. Gen. Bus. Law § 349-a. The Act applies to businesses that use "personalized algorithmic pricing" to set the price of goods or services and then offer, display or make available to a consumer such goods and services using the personal data specific to that consumer. These businesses will now be required to make a "clear and conspicuous disclosure" that states "THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA."

This disclosure must be made:

[I]n the same medium as, and provided on, at, or near and contemporaneous with every advertisement, display, image, offer or announcement of a price for which notice is required, using lettering and wording that is easily visible and understandable to the average consumer.

Coverage of the Act

The Act defines "personalized algorithmic pricing" as dynamic pricing (i.e., pricing that fluctuates dependent on conditions) that is set by an algorithm that uses personal data. "Personal data" is defined broadly as "any data that identifies or could reasonably be linked, directly or indirectly, with a specific consumer or device." (The definition specifically excludes location data used by ride-hailing apps and similar transportation services.) It is worth distinguishing this personalized use of algorithms from the use by companies of algorithms based on general market conditions such as demand, supply or inventory amounts, rather than the personal data of an individual consumer.

Exceptions

There are exceptions to the Act's coverage. Insurance companies and regulated financial institutions are not subject to the Act's requirements. The Act also exempts an offer to a consumer party to an existing subscription-based contract for goods or services with a company if that offer by such company is at a price that is less than the price for the same good or service set forth in the subscription-based contract.

Enforcement

Enforcement authority for the Act is vested in the attorney general of the state of New York. If the attorney general believes an entity is violating the Act, they must first send a cease and desist letter, specifying the alleged violation(s) and the remedies required to cure within a designated timeline. If the entity fails to cure the violations, the attorney general can then seek an injunction and impose fines of up to $1,000 "for each violation." The Act does not specify what would constitute a discrete violation. This leaves open the possibility that a company could have significant exposure by violating the Act.

New York Attorney General Letitia James has signaled that her office plans to actively enforce the Act. On November 5, 2025, shortly before the effective date, the Office of Attorney General issued a consumer alert describing how algorithmic pricing works and emphasizing the new disclosure obligations. This consumer alert encouraged New Yorkers who believe they have encountered algorithmic pricing that is not properly disclosed under the Act to file a complaint with the attorney general's office.

The office has already demonstrated a willingness to explore possible enforcement actions. On January 8, 2026, it sent a letter to Instacart, requesting information "concerning recent reports of substantial price variations among shoppers using Instacart." The letter requests information from the company regarding various aspects of its pricing practices and programs.

What Companies Need to Know

Entities that use algorithms to set or assist in setting prices for goods or services being marketed and sold to consumers in New York should:

• Assess whether their pricing practices constitute or include "personalized algorithmic pricing" under the Act;
• Identify all consumer‑facing price communications (websites, apps, email offers, in‑store displays, labels, and other media) where individualized prices are presented based on personal data; and
• Add clear and conspicuous disclosures in the required statutory language near each such communication, in the same medium and contemporaneous with the price.

For More Information

If you have any questions about this Alert, please contact Lee J. Potter Jr., any of the attorneys in our Fashion, Retail and Consumer Branded Products Industry Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.