New Jersey has enacted the Fair Price Protection Act, banning retailers from using shoppers’ personal data to set individualised prices on groceries and other essential goods.

Upon signing the act, state governor Mikie Sherrill brought the legislation into effect immediately.

It targets “surveillance pricing” — a practice in which retailers use consumer data, including browsing behaviour, location and past purchases, together with AI, to change prices for the same product according to what an algorithm determines a shopper would be willing or able to pay.

The law allows standard market-driven price changes to continue.

Loyalty schemes and promotional discounts are also still allowed, as they are outside the scope of the measure.

The act also places a 12-month pause on the rollout of new electronic shelf label systems.

Over that period, the New Jersey Innovation Authority will review the technology’s wider implications and effects.

Retailers that already use electronic shelf labels may continue operating, servicing or replacing them during the freeze.

The measure follows earlier action by the Sherrill administration on hidden charges and algorithm-driven rent pricing, and forms part of a broader effort to establish clearer rules for emerging pricing tools while protecting consumers from data-based price discrimination.

Sherrill said: “New Jersey families are already feeling the pressure of higher costs. The last thing they need is companies secretly using their personal data to charge them more than someone else for the exact same product.

“If businesses want to compete, they should do so by offering better prices, not by finding new ways to squeeze shoppers.  This law puts New Jersey shoppers first by protecting their privacy and ensuring fairness in pricing.”

New Jersey's move follows New York, where lawmakers last month passed their own measure against algorithm-based personalised pricing.

The One Fair Price Act, approved by the New York legislature, similarly takes aim at surveillance pricing, targeting the use of personal data by algorithms to display differing prices to different customers for identical goods or services.