Starting in October in Maryland, large grocery retailers will be prohibited from using shoppers’ personal data to set higher prices for a specific consumer.
The Protection from Predatory Pricing Act, now signed by Governor Wes Moore, is meant to stop retailers from using shoppers’ personal data to tailor higher grocery prices to individuals.
Every covered food retailer and third-party food delivery provider in the state, the country’s largest chains very much included, would have to fall in line. The question, then, is what exactly the law is trying to stop.
The tech behind the tag
What the law actually targets is a practice that, until recently, was mostly associated with industries like air travel, ride-hailing, and online commerce. Prices that move.
In the case of groceries, these movements have become possible at scale as digital shelf labels have been quietly replacing paper tags across the industry, alongside apps, loyalty systems, and delivery platforms that help retailers tailor prices and promotions more precisely.
A label connected to a back-end system can be changed in seconds. Combined with information harvested from store apps and other digital tools, retailers can, in theory, vary prices or promotions across shoppers depending on what the software has decided about each one.
That last part is what Maryland’s bill is most concerned with. Under the law, covered food retailers and third-party food delivery providers would be barred from using shoppers’ personal data or dynamic pricing to charge a specific consumer a higher price.
Fines for breaking the rules can reach ten thousand dollars for a first offense and $25,000 for subsequent ones, though the bill also gives retailers 45 days to cure a violation after notice.
Moore, in pushing the bill, has framed the practice as a transparency problem more than a cost one. Customers ought to know, he has said, that the number on the shelf is going to be the number at the register.
Loopholes and lingering doubts
Reaction inside Maryland has been mixed. Shoppers interviewed by local outlets described their grocery bills as out of control, with one Baltimore-area resident estimating that his runs at around $125 twice a week for not very much food.
Part of the appeal of the bill appears to be about being able to plan a week and knowing what dinner will cost on Thursday when you do the shopping on Sunday.
Consumer groups have split over whether the bill is a meaningful first step or too weakened by loopholes to matter. Consumer Reports has supported the underlying principle but pointed out that enforcement is the bill’s weakest link.
According to the group, a retailer caught running afoul of the rule can simply stop, and there is no automatic penalty for what was already done. Several carve-outs in the final text, the organization has said, will further dilute the impact.
Retailers pushed back earlier in the process, but the Maryland Retailers Alliance (MRA) later accepted the framework as workable, noting that discounts, promotions, and loyalty-related pricing are still permitted.
The American Economic Liberties Project (AELP) has gone the other way and called for a veto. The group’s complaint centers on exemptions for loyalty programs, subscription services, and other carve-outs, which it argues cover much of what real-world dynamic pricing actually looks like.
Maryland’s law may or may not meaningfully change pricing practices, but the technology that made the conversation possible is not going anywhere. Walmart, Kroger, and Whole Foods have all adopted digital shelf labels in some form. Walmart, however, has maintained that its labels are not used for dynamic pricing. Whether other chains can say the same is likely to come under closer scrutiny now that the bill has been enacted.
Sources: Maryland General Assembly, The Sun, Maryland Bill Text, Governor’s Office, Consumer Reports, AELP