California Bill To Ban 'Surveillance Pricing' Draws Fire From Grocers Who Say It Would Kill Digital Coupons

California lawmakers are fighting over a bill that supporters say protects consumers from data-driven price discrimination and opponents say will strip away the discounts working families rely on.

Assemblymember Chris Ward, a San Diego Democrat, introduced AB 2564 to restrict what's known as surveillance pricing. That's when companies use personal data, gathered from apps, browsing history, or third-party data brokers, to charge different customers different prices for the same product based on things like income bracket or shopping habits.

This is Ward's second attempt at the idea. He pulled a similar bill last year. This time, he's got momentum, according to the New York Post, as affordability has become one of the defining political issues heading into the next election cycle.

What The Bill Actually Says

AB 2564 doesn't ban discounts outright. It carves out exceptions. A discounted price is fine if it's publicly available. A discount based on collected digital data is also allowed, but only if it meets specific conditions: the criteria for getting the discount has to be publicly disclosed and something anyone can do, like signing up for a newsletter. The discount has to go to a broad group, such as teachers, not a single targeted individual. And it has to run through a formal rewards or membership program.

"The last thing anyone needs is to be charged higher prices based on their personal data," Ward said in March. "This practice hits hardest for low-income individuals and shoppers and those with limited shopping options."

Grocers Say The Fix Breaks What Works

Retailers see it differently. Rachel Michelin, president of the California Retailers Association, says the bill will end up hurting the exact shoppers it claims to protect.

"Families are stretching every dollar right now," Michelin said. "The last thing they need is Sacramento making that harder." She added that families "rely on weekly specials, digital coupons, and loyalty programs to stretch their household budgets" and called the bill "a solution looking for a problem" that "moves California in exactly the opposite direction of affordability."

A new opposition coalition called Californians for Consumer Affordability has formed specifically to fight the bill, according to the New York Post. The group argues AB 2564 creates a legal framework so complicated that many businesses won't be able to navigate it, driving up compliance costs, particularly for larger retail chains that would then need new legal and technical infrastructure just to keep offering discount programs. For many small businesses, critics say, it could mean deciding it's not worth the risk to keep certain discount programs running at all.

The core of that argument: personalized loyalty programs and app-based discounts already run on the same data collection the bill targets. If the compliance bar to prove a discount qualifies under the exceptions is too high, retailers may just drop the personalized discount programs entirely rather than risk running afoul of the law. That would mean fewer digital coupons, not fewer instances of price gouging.

The California Retailers Association has said it wants the bill narrowed to focus only on prohibiting price increases, and has claimed its suggested changes haven't been adopted so far.

The Case For The Bill

Ward's concern is real. Surveillance pricing, using personal data from apps, web browsing history, and data brokers to price shoppers differently based on income bracket or shopping behavior, is the practice the bill is built to stop. The worry that lower-income shoppers, who often have fewer alternative stores and less time to comparison-shop, could get stuck paying more under an opaque algorithm is a legitimate consumer protection concern, not a hypothetical one.

The disagreement isn't over whether covert price discrimination is bad. It's over whether AB 2564, as written, actually distinguishes between predatory algorithmic pricing and ordinary loyalty-card discounts that consumers sign up for voluntarily and benefit from. Retailers argue the bill's compliance requirements are broad enough to sweep up the second category along with the first.

What Happens Next

AB 2564 has not yet been voted into law. It remains under consideration in the California Legislature, and the opposition campaign led by Californians for Consumer Affordability is actively lobbying to amend or kill it before it reaches a floor vote.

No hearing date or final vote timeline was included in available reporting. The question is whether Ward's office will narrow the bill's compliance requirements to specifically target opaque, individually-targeted pricing algorithms while leaving alone the transparent, opt-in coupon and rewards programs that grocers say are doing the opposite of price gouging. Whether the amended language, if it comes, will satisfy retail groups or shift the fight to the next legislative session won't be clear until negotiations proceed.