In a major step toward transparency in digital commerce, New York’s Algorithmic Pricing Disclosure Act officially took effect on November 10, 2025, requiring businesses to disclose when they use personalized algorithmic pricing to determine what consumers pay.
The new New York law mandates that any company using automated pricing systems based on personal data must display a clear and visible notice stating, “This price was set by an algorithm using your personal data.”
Companies that fail to comply could face civil penalties of up to $1,000 per violation, marking one of the most stringent algorithmic pricing disclosure requirements in the United States.
Scope and Impact of Personalized Algorithmic Pricing Law
Under the Algorithmic Pricing Disclosure Act, businesses operating in or serving customers within New York must disclose if they use personalized algorithmic pricing — defined as dynamic pricing set by an algorithm that uses personal data.
The law broadly defines personal data as any information that identifies or could reasonably be linked, directly or indirectly, to a specific consumer or device. This includes data derived from online behavior, purchase history, device identifiers, or other digital footprints — regardless of whether users voluntarily provided such data.
Entities covered by the law include those domiciled or conducting business in New York, regardless of where their headquarters are based, if they promote algorithmically determined prices to consumers in the state.
The law also clarifies that certain data uses and sectors are exempt. For instance, location data used solely by transportation network companies and for-hire vehicles to calculate fares based on mileage or trip duration is excluded. Additionally, regulated financial institutions, insurance companies, and businesses offering subscription-based contracts fall outside the Act’s scope.
Court Upholds the Algorithmic Pricing Disclosure Act
Implementation of the Algorithmic Pricing Disclosure Act had been delayed following a First Amendment challenge in the Southern District of New York. The case questioned whether compelling companies to disclose algorithmic pricing practices infringed upon free speech rights.
However, the court upheld the law’s constitutionality, ruling that the required disclosure was “plainly factual” and not controversial merely because businesses might prefer not to reveal their pricing methods. With this ruling, enforcement proceeded without further delay.
Attorney General’s Office to Enforce Personalized Algorithmic Pricing Compliance
New York Attorney General Letitia James has made clear her intention to rigorously enforce the new algorithmic pricing disclosure law. On November 5, 2025, her office issued a consumer alert urging residents to report companies that fail to display the required notices through an official online complaint form.
The Attorney General’s Office is empowered to investigate potential violations whenever there is “reason to believe” a company is not in compliance. This can include complaints from consumers or findings from state-led audits.
Violators will first receive a notice to cure alleged violations within a specified period. If they fail to take corrective action, the Attorney General can seek injunctions and monetary penalties — up to $1,000 per instance, without any maximum cap. Importantly, enforcement does not require proof of individual consumer harm or financial loss, making it easier for regulators to act swiftly.
