Algorithmic Pricing Under Scrutiny: What You Need to Know

Regulators are accelerating oversight of algorithmic and personalized pricing with the Federal Trade Commission (FTC) and key states moving on parallel tracks that could reshape how companies deploy dynamic pricing models. Following recent enforcement actions targeting deceptive fee practices in online food delivery services, the FTC has launched a rulemaking process that raises fundamental questions about pricing transparency, data use and consumer disclosures. Meanwhile, Maryland, California and New York have enacted or advanced distinct regulatory regimes, from outright restrictions to mandatory disclosures and antitrust-focused prohibitions. For companies using dynamic pricing, the direction of travel is clear: increased scrutiny, fragmented requirements and a growing need for proactive compliance.

Nationwide: FTC’s Advance Notice of Proposed Rulemaking

The FTC issued the notice April 14, 2026 in response to recent settlements with online food delivery platforms for allegedly falsely advertising free delivery and misrepresenting delivery costs, and seeks input on whether more needs to be done by regulators to deter these practices.

The notice questions factors relevant to dynamic and personalized pricing, including:

• Sufficient disclosure of total prices, fees and charges
• Sufficient and clear disclosures about the factors used to determine variable, contingent and personalized pricing
• Data types and sources
• How personalized prices differ from standard prices

Critically, the notice asks whether a nationwide rule is needed to strengthen consumer protections and deter unfair practices, suggesting that federal regulations may be on the way.

Maryland: Predatory Pricing Act

One state has already taken action to address personalized pricing in the food sector. Maryland’s Protection from Predatory Pricing Act, which takes effect on October 1, 2026, prohibits food retailers and third-party delivery service providers from engaging in dynamic pricing or using consumer personal data to set higher prices for consumer goods or services.

Maryland defines “dynamic pricing” as “discriminatory practice of offering or setting a personalized price for a good or service that is specific to a consumer based on the consumer’s personal data, regardless of whether the seller collected or purchased the personal data.”

The law also prohibits a food retailer or third-party delivery service provider from using “protected class data” to offer, advertise, or sell a consumer good or service to a consumer for whom the protected class data pertains, if the use of the data has the effect of withholding or denying an accommodation, advantage or privilege. “Protected class data” is defined as information that identifies, directly or indirectly, traits that are legally protected from discrimination under state or federal law.  

The Maryland AG will enforce the law, and must give businesses 45 days to cure violations before initiating enforcement action. There is no private right of action.

There are various exemptions, such as promotional offers and loyalty programs, pricing based on objective cost differences (like shipping), variations due to product availability, and situations where consumers agree to share personal data in exchange for a price.

New York: Mandatory Disclosure of Algorithmic Pricing

New York has also passed legislation to regulate algorithmic pricing extending beyond food and delivery services. In May 2025, New York enacted Assembly Bill A3008C, which regulates the use of algorithms that process personal data to set prices. The law requires The law requires businesses that use personalized, data-driven pricing to clearly disclose: “THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA

Exemptions cover certain location-based pricing services (like ride-shares), insurance and most consumer financial products, and subscription offerings where the displayed price is discounted.

New York’s law has survived a First Amendment challenge by the National Retail Federation, who argued it forces retailers to deliver a misleading, government-scripted opinion. The court rejected this argument, holding that the required disclosure is plainly factual and accurately describes the retailer’s practices. The court found the law does not force retailers to take a position and that the disclosure helps reduce consumer confusion by making pricing more transparent.

The New York AG has signaled active enforcement interest since November 2025. The law requires notice and an opportunity to cure before penalties, with fines of up to $1,000 per violation.

California: Antitrust-Focused Restrictions on Common Pricing Algorithms

California has taken a different, competition-focused approach. In October 2025, California amended the Cartwright Act, its principal antitrust statute, to address algorithmic pricing. The amendments make it unlawful to use or distribute a common pricing algorithm as part of a contract, trust or conspiracy that restrains trade. It is also unlawful to use or distribute a common pricing algorithm to coerce another person to set or adopt a recommended price or commercial term for the same or similar products or services in California.

Recommendations for Businesses

Given the increasing regulatory focus on algorithmic pricing at both the federal and state levels, businesses should consider the following steps:

• Audit current pricing: Identify any pricing algorithms using personal consumer data to set or adjust prices and map the data inputs, sources and outputs of those systems.
• Identify practices that are prohibited under Maryland’s law: ensure that any practices that are prohibited in Maryland cease before the October effective date.
• Assess disclosure obligations: Determine if New York’s disclosure requirement applies. If so, use the mandated consumer-facing notice (“THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA”) and consider whether any exemptions are available.
• Review competitor data-sharing arrangements: Under California’s amended Cartwright Act, businesses should review any shared pricing algorithms used with competitors to confirm these tools are not being used to fix prices or to push others into following the algorithm’s suggested price.
• Monitor the FTC rulemaking process: Consider submitting comments on the proposed rulemaking if your business operates in the online food or grocery delivery sector.
• Engage cross-functional teams: Coordinate with product, engineering, data science and marketing teams to ensure pricing systems are designed with regulatory compliance in mind, and that consumer-facing disclosures are implemented where required.
• Prepare for a multi-state compliance landscape: As states and the Federal government rollout similar rules, businesses operating across multiple jurisdictions need a compliance framework capable of accommodating varying and potentially overlapping requirements.