New York's Algorithmic Pricing Disclosure Act (NY S 3008) requires businesses that set prices algorithmically using consumers' personal data to display a disclosure near the price. Enacted July 8, 2025 and enforced from November 10, 2025, it is the first US state law to mandate algorithmic-pricing disclosure backed by per-violation penalties. Attorney General Letitia James has issued a consumer alert, sent a demand letter to Instacart, defended the law against a National Retail Federation First Amendment challenge, and advocated a follow-on legislative package that would shift from disclosure to outright prohibition.
The statute
The Act (NY S 3008) was enacted on July 8, 2025, with the disclosure mandate enforced from November 10, 2025. It requires covered businesses to display, near the price, the statement: "THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA." Violations carry a penalty of $1,000 each. It is the first US state law to mandate algorithmic-pricing disclosure with per-violation penalties.
Enforcement and AG actions
Ahead of the November 10, 2025 effective date, James issued a consumer alert on November 5, 2025, stating: "The law is clear: if businesses use algorithmic pricing, they must notify consumers." The alert recommends that consumers compare prices across accounts and devices, check loyalty discounts against those offered to peers, and monitor price changes after tracked actions.
In January 2026, James sent a demand letter to Instacart requesting information on its algorithmic pricing, following reports that users saw significantly different prices for identical products in connection with dynamic-pricing experiments. It was the first publicly disclosed enforcement action under the statute targeting a specific operator.
NRF First Amendment challenge
The National Retail Federation (NRF) filed a First Amendment lawsuit to block the law on the day it was enacted, July 8, 2025, arguing the disclosure mandate violates the compelled-speech doctrine. James defends the law as a valid consumer-protection disclosure, and on February 16, 2026 urged the court to uphold it against the NRF challenge. The case is described as the first major First Amendment test of a state AI-related disclosure requirement, and its outcome is positioned to bear on the constitutional status of state AI-disclosure laws more broadly, including the theory advanced in xAI LLC v. Weiser — Complaint (D. Colo. 1:26-cv-01515) and future challenges to frontier-AI transparency laws.
"One Fair Price" package
In the first quarter of 2026, James advocated a legislative package shifting from disclosure toward prohibition, comprising two bills: the One Fair Price Act, which would ban surveillance pricing outright; and the Protecting Consumers and Jobs from Discriminatory Pricing Act, which would ban electronic shelf labels and prohibit surveillance pricing in grocery stores. The progression from disclosure to prohibition has been characterized as indicative of the likely direction of state-level policy.
Federal context
Several federal threads run parallel to the New York regime. The Federal Trade Commission opened a 6(b) surveillance-pricing study in 2024, releasing preliminary insights in 2025; new FTC leadership deprioritized its continuation. Delta Air Lines announced and then walked back plans for AI ticket-personalization under Department of Transportation and congressional pressure in August 2025. Senator Klobuchar advanced a separate federal antitrust proposal in February 2025.
The law's reach has been described as a Brussels-effect candidate, on the view that New York's jurisdictional weight makes the disclosure requirement de facto national policy for most large e-commerce platforms.
Relationships
- supports: Algorithmic Pricing and Antitrust, Premature Antitrust Standards in Algorithmic Pricing, FPF — A Price to Pay: U.S. Lawmaker Efforts to Regulate Algorithmic Pricing.
- depends-on: Techno-Federalism: How Regulatory Fragmentation Shapes the U.S.-China AI Race, AI Compliance Industry / Regulatory Fragmentation.
- related: xAI LLC v. Weiser — Complaint (D. Colo. 1:26-cv-01515) (parallel First Amendment theory), AI and the First Amendment, FTC 6(b) Study on AI Partnerships and Investments (federal predecessor), NYC Local Law 144 (Automated Employment Decision Tools).