Maryland’s Personalized Pricing Ban Marks Shift From Disclosure to Prohibition

Maryland will become the first state to put an outright ban on certain personalized grocery prices into effect Oct. 1, moving beyond the disclosure requirements that have defined much of the early state response to algorithmic pricing. But it may not be the last.

Maryland Gov. Wes Moore signed the Protection From Predatory Pricing Act in April. Since then, Connecticut and New Jersey have enacted restrictions of their own, a sequence that makes Maryland’s law an early model for states considering whether disclosure goes far enough, according to an analysis by law firm Baker Donelson. The Maryland measure is narrower than a general prohibition on changing prices. It targets only higher prices for tax-exempt food that are specific to consumers and based on their personal data.

The law covers food retailers operating establishments of at least 15,000 square feet that sell tax-exempt food, along with third-party services facilitating delivery of that food, the analysis said. It bars them from using “dynamic pricing,” defined as setting a consumer-specific price based on personal data, to charge a higher price for covered food. It also prohibits using “personal data” to set a higher price for an individual shopper. The statute takes its definition of personal data from the Maryland Online Data Privacy Act, which defines the term broadly as any information that is linked or linkable to an identified or identifiable consumer.

A separate provision bars the use of protected-class data in offers or sales when doing so denies a consumer an advantage available to others. A “protected class” is an individual or group of individuals legally protected from discrimination under Maryland or federal law, according to the analysis.

The statute preserves room for ordinary commercial distinctions, per the analysis. Its exceptions include promotional offers, voluntarily joined loyalty and rewards programs, subscriptions, differences tied to location or objective costs, and price corrections. But an exception for a loyalty program is not a blanket clearance for every use of member data. A grocer must understand whether that data feeds a model that produces individualized increases, not simply whether the final price appears in a loyalty app.

Enforcement authority rests with the Maryland attorney general’s Consumer Protection Division, the analysis said. Before bringing an action, the division must give a business notice and 45 days to cure an alleged violation. The law does not create a private right of action. Available consumer protection remedies include civil penalties of up to $10,000 per violation, rising to $25,000 for repeat violations, as well as restitution and injunctive relief.

The absence of a private right of action in the law does not alleviate the wider legal risk companies could face, according to the analysis. Maryland’s Online Data Privacy Act separately restricts collection of personal data to what is reasonably necessary and proportionate to provide a requested product or service. Plaintiffs have challenged personalized pricing under wiretapping and consumer protection laws. A pricing practice could draw scrutiny over both the resulting charge and the tracking technology that supplied the data.

The Maryland law also contains a distinct disclosure rule for certain merchants outside its food sector prohibition, reflecting a policy choice by lawmakers to treat food prices differently from other goods and services. For national businesses, the growing range of state approaches makes a single disclosure notice an uncertain compliance strategy, the analysis said.

Merchants should map pricing inputs across stores, websites, apps and delivery partners; test whether loyalty benefits are available uniformly; review vendors’ data inputs and contractual responsibility; and coordinate pricing teams with privacy counsel, per the analysis. Companies should document the basis for each price difference and the specific exception they believe applies. That record may matter beyond Maryland if more states follow its lead and prohibit personalized increases outright.