Maryland’s dynamic pricing crackdown: A win for fair competition or a recipe for higher shelf prices?

Maryland Governor Wes Moore recently signed HB 895, the Maryland Protection From Predatory Pricing Act, into law, making Maryland the first state in the nation to restrict personalized, data-driven pricing in the grocery sector. The Act, signed on April 28, 2026, prohibits food retailers operating establishments of at least 15,000 square feet and third-party delivery service providers from using dynamic pricing to charge higher prices to specific consumers or classes of consumers.

Under the Act, “dynamic pricing” is defined as “offering or setting a personalized price for a good or service that is specific to a consumer based on the consumer’s personal data, regardless of whether the seller collected or purchased the personal data.” The Act aims to address the use of artificial intelligence (AI) algorithms to process consumer data collected from loyalty programs, browsing history, and purchasing behavior to tailor prices to individual shoppers.

Taking effect on October 1, 2026, the Act empowers Maryland’s Attorney General to bring suit for violations. It also imposes civil penalties of up to USD10,000 per violation or up to USD25,000 per violation for repeat offenders.

Arguments in favor of the law

Proponents of the Protection From Predatory Pricing Act contend that it offers several potential business advantages. First, the Act aims to create a level playing field by ensuring that no competitor can gain a market advantage through opaque, data-driven price manipulation. Independent grocers, who rely on straightforward, cost-based pricing, have noted that the Act focused on practices that they “simply do not use”; the legislation validates their existing model and removes any competitive pressure to adopt surveillance-based pricing tools.

Additionally, the Act’s narrowing during the legislative process produced a workable framework for retailers. Some retailers believe that extensive amendments “allow[] for both” consumer discounts and price increases. The Act’s final version expressly preserves retailers’ ability to offer promotional discounts, subscription-based pricing, and prices to consumers who consent to providing personal data in exchange for receiving those prices.

Arguments opposing the law

Opponents of the Protection From Predatory Pricing Act have raised various business-focused concerns. Retail and technology trade groups argue that the Act’s definitions could limit beneficial uses of consumer data that prevent food waste and help manage inventory, including discounts, personalized coupons, and dynamic markdowns on perishable goods approaching expiration. Critics also warn that the Act could put Maryland retailers at a competitive disadvantage, leaving them to “bear compliance costs and lose pricing tools that competitors in neighboring states use freely,” while shoppers could simply cross state lines to access personalized deals. Industry groups also cautioned that restricting data-driven pricing could lead retailers to adopt more uniform pricing strategies, possibly resulting in higher shelf prices to absorb inefficiencies. Others argue that the Act is a cure in search of a disease, as using “dynamic pricing to engage in anticompetitive conduct that excludes competitors or exploits a dominant firm’s market position is already illegal.”

Furthermore, critics emphasized that the Act addresses potential harms that, they argue, have not been observed in highly competitive markets, such as grocery stores.

A growing patchwork of state bills

Maryland may be first, but it will not be alone for long. More than 40 dynamic pricing bills have been introduced in 2026. For retailers operating across state lines, the emerging patchwork is a key development – particularly because many pending proposals extend beyond Maryland’s law.

While Maryland’s Protection from Predatory Pricing Act is deliberately narrow, bills gaining traction in other states take a broader approach:

• California AB-2564: Would prohibit surveillance pricing by all retailers – not just grocers – with civil penalties up to USD12,500 per violation, or three times that amount for intentional conduct
  
  
• Illinois SB 2255: Would ban the practice economy-wide and prohibit “any digital price display technology” in large grocery stores, with a private right of action carrying USD5,000 in liquidated damages per violation
  
  
• Colorado HB 1210: Addresses individualized wage setting that relies on surveillance data, as well as individualized price setting
  
  
• New York A9349: Would prohibit personalized algorithmic pricing, grant consumers a private right of action with statutory damages of up to USD5,000 per violation, and allow courts to disgorge profits

The lack of uniformity across these proposals presents its own compliance challenge. Definitions vary by state: Maryland defines “dynamic pricing,” while California and Illinois use the term “surveillance pricing,” and New York legislates around “personalized algorithmic pricing.” Retailers operating in multiple states could face overlapping obligations with conflicting terminology.

Whether – and in what form – these proposals ultimately take effect may face additional uncertainty. On March 20, 2026, the White House released its National Policy Framework for Artificial Intelligence, directing Congress to pass a package of laws and “preempt state AI laws that impose undue burdens to ensure a minimally burdensome national standard consistent with these recommendations.” These directions followed a December 2025 Executive Order (EO) titled “Ensuring A National Policy Framework For Artificial Intelligence” that called for the framework and instructed the Department of Justice to “challenge State AI laws inconsistent with” the minimally burdensome policy in court on the grounds that such state laws are preempted by federal law. However, with neither a comprehensive AI statutory scheme nor a dynamic pricing law on the federal horizon, the effectiveness of these legal challenges remains to be seen.

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In the absence of comprehensive federal regulation, companies are encouraged to begin mapping their pricing data flows now and prepare for an increasingly complex regulatory landscape.

For more information, please contact the authors.