“This law interferes with retailers’ ability to provide their customers with the highest value and best shopping experience they can,” said Stephanie Martz NRF chief administrative officer and general counsel. “Algorithms are created by humans, not computers, and they are an extension of what retailers have done for decades, if not centuries, to use what they know about their customers to serve them better. It’s just done at the scale of the modern economy. Stigmatising tools that drive prices down turns offering deals into a liability, and consumers will end up paying more.”
The NRF argued that the law, introduced with minimal debate as part of the state’s budget and signed by Governor Kathy Hochul on May 9, is vague and riddled with arbitrary exemptions. The lawsuit claims it violates the First and 14th Amendments and asks the court for both preliminary and permanent injunctions to stop its enforcement.
According to the complaint, retailers rely on data such as purchase history, online cart contents, and zip codes—voluntarily shared by customers—to optimise pricing. The NRF contends that this approach does not involve sensitive personal data and benefits shoppers through personalised offers and lower prices.
The organisation stated, “This act compels NRF’s members to impugn their pro-consumer practices against their will.” It argued that requiring retailers to label such prices with what it calls a “misleading and ominous warning” could confuse and deter consumers. “Although the state is free to express its opinion that algorithmic pricing is dangerous, it cannot force businesses that disagree to do so,” the complaint added.
The suit further criticised the law as being based on ‘speculative fear’ rather than concrete evidence of harm, pointing out that existing laws already address price discrimination or gouging. Traditional retail practices such as issuing coupons, loyalty rewards, or responding to competitor pricing have long existed, the NRF noted—algorithmic pricing simply applies these practices at a more advanced and larger scale.
The case may set a precedent for how far state governments can go in regulating digital pricing strategies in retail, especially as technologies continue to transform the shopping experience.
ALCHEMPro News Desk (SG)
Receive daily prices and market insights straight to your inbox. Subscribe to AlchemPro Weekly!
marketing@alchempro.com
