New York Enacts First-Of-Its-Kind Dynamic Pricing Law – Advertising, Marketing & Branding

On May 9, 2025 New York Governor Kathy Hochul signed the
Algorithmic Pricing Disclosure Act (the “Act”) into law.
This is the first time that a state jurisdiction has mandated use
of certain disclosures if consumer data has been utilized to
dynamically set pricing for products and services. As our readers are aware, the use of
artificial intelligence (“AI”) in marketing is already
highly regulated. States are now turning their attention to AI
usage in broader areas of commerce. Although the Act does not
specifically mention AI, it is intended to protect State consumers
from deceptive business practices employing the same or similar
functionality.

The Act is detailed in Part X of the massive Transportation, Economic Development and
Environmental Conservation Bill (the “TED Bill”). New
York State’s new dynamic pricing disclosure requirements
took effect on July 8, 2025.

Key Aspects of the Dynamic Pricing Law

The primary upshot of the Act is that businesses must clearly
and conspicuously post a disclosure, which states:
“This price was set by an algorithm using your
personal data,” if data specific to a particular
individual was utilized in setting pricing. Failure to prominently
provide such disclosure constitutes a deceptive act or practice
under New York State law.

The Act specifically defines the following key terms:

• Personalized algorithmic pricing: dynamic pricing derived from
  or set by an algorithm that uses consumer data;

• Dynamic pricing: pricing that fluctuates dependent on
  conditions;

• Consumer data: any data that identifies or could reasonably
  link, directly or indirectly, to a specific natural person or
  device, excluding location data; and

• Protected class data: information that identifies a
  characteristic that is legally protected from discrimination under
  state or federal law, including but not limited to ethnicity,
  national origin, age, disability, sex, sexual orientation, gender
  identity and expression, pregnancy outcomes and reproductive
  health.

Why Is Dynamic Pricing Law Compliance Important?

The Act authorizes the New York Attorney General to bring suit
against any business accused of not adequately disclosing the use
of algorithmic dynamic pricing. Businesses that violate the Act
face injunctive remedies and thousands of dollars in penalties per
violation. Importantly, the Act creates a private right of
action for individuals whose protected class data was used
to: 1) withhold or deny any of the accommodations, advantages,
and/or privileges afforded to others; or 2) present a different
price offer, if based in part or in whole upon this protected class
data.

As stated, New York’s algorithmic pricing disclosure
requirements are now in effect. Companies that algorithmically
price their products and services should consult with legal counsel
to ensure that their practices comport with relevant State
provisions.

The attorneys at Klein Moynihan Turco have decades of experience
in guiding companies through emerging legal landscapes. Please
email us at [email protected] or call us at (212) 246-0900 if
you would like assistance with complying with the Act or other
state and federal marketing laws.

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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.