A sweeping surveillance pricing ban identified by the California Chamber of Commerce as a Cost Driver bill that would have threatened personalized discounts and loyalty programs failed to advance to Gov. Newsom’s desk for final action.
AB 2564 (Ward; D-San Diego) would have banned “surveillance pricing” by retailers, but its language would have regulated prices in either direction, placing restrictions on targeted discounts consumers have come to rely on during an affordability crisis, along with the higher prices the bill is intended to address.
The exemptions added to the bill in the final weeks of session did not permit businesses to use information voluntarily provided by customers to offer them discounts. The narrow language of the bill created a risk that retailers would discontinue personalized discounts altogether rather than face compliance violations.
Senate Vote
On Aug. 31, AB 2564 passed the Senate by a narrow margin. CalChamber appreciated the senators who voted against the measure for recognizing its potential impact on personalized discounts and loyalty programs valued by consumers.
The bill then returned to the Assembly for a vote to concur in Senate amendments, but lawmakers in that chamber did not take up the measure before the Legislature adjourned. After repeatedly expressing significant concerns with the legislation to lawmakers, CalChamber welcomed the outcome, which marked the end of the legislative process for AB 2564.
CalChamber acknowledged that the bill was amended by the author several times over the last year, but the most recent version was drafted without opposition input and would not work in practice as a means of protecting discounts. Although opponents proposed amendments, those suggestions were not taken, and each iteration of the bill remained too narrow to protect the personalized discounts and loyalty programs that customers have come to rely on as California faces an ongoing affordability crisis.
Discounts Not Problem
Targeted price increases that make living in the state more expensive should not be permitted, but discounts are not the problem. CalChamber does not oppose banning targeted price increases based on personalized data, but discounts should not face burdensome requirements or create potential liability for businesses.
When AB 2564 was introduced, the author cited other states that are considering, or have enacted, their own surveillance pricing bans, but those efforts have recognized concerns that such laws could unintentionally harm discounts.
A nuanced approach is needed to protect discounts and loyalty programs, and the California Legislature should consider any proposed ban critically before revisiting the issue in the next session.
