Seattle has become the first US city to prohibit grocery retailers from setting individualised prices for shoppers based on personal data.

The measure, called the Fair and Transparent Pricing policy, was sponsored by mayor Katie Wilson and city council member Alexis Mercedes Rinck, with council members Dionne Foster and Rob Saka serving as co-sponsors.

It was shaped over several months through consultation with labour groups, industry representatives and community advocates.

The new rules prevent large online and physical grocery retailers from using sensitive personal information such as browsing history, chatbot conversations, employment status, gender, race or social media activity to determine what individual customers pay.

Retailers need to display prices clearly and make them available equally to all shoppers.

Conventional coupons and standard discounts, including those offered to seniors or veterans, will continue to be allowed.

The policy responds to the growing use of AI and personal data by companies to charge different customers different prices for the same products.

City officials pointed to investigations, including reports involving Seattle shoppers, showing that algorithm-based pricing had led to notable price disparities for identical goods.

Wilson said: “Food is an essential good that’s getting more expensive all the time. People have been clear: they don’t want their data fed into algorithms that decide how much they pay at the grocery store.

“Everyone deserves transparent pricing and equal treatment, not hidden systems that charge some shoppers more than others.”

Seattle's move follows comparable consumer protection measures introduced elsewhere in the US.

New Jersey passed the Fair Price Protection Act in July, barring retailers from using shoppers' personal data to set individualised prices on groceries and other essential items.

That law addresses "surveillance pricing", in which retailers combine consumer data, including browsing habits, location and purchase history, with AI to adjust prices for the same product based on what an algorithm predicts a shopper is willing or able to pay.

In June, New York lawmakers passed a bill barring businesses from using consumer data to drive algorithm-based personalised pricing.