New York's Novel Algorithmic Pricing Disclosure Law Takes Effect

On November 10, 2025, New York's Algorithmic Pricing Disclosure Act (the "Act"), a first-of-its-kind statute, takes effect. The Act requires companies that use algorithmic pricing—the use of automatic computational processes to set and dynamically adjust prices—based on consumers' personal data to display a clear and contemporaneous disclosure, stating: "THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA." Companies that fail to do so may face civil penalties of up to $1,000 for each violation.

Enforcement previously had been stayed pending resolution of a First Amendment challenge, brought in the Southern District of New York. The court upheld the Act as constitutional, noting the compelled disclosure was "plainly factual" and "not rendered 'controversial' merely because the regulated entity does not wish to make that disclosure."

The Act applies to entities domiciled or doing business in New York that set prices using "personalized algorithmic pricing" and directly or indirectly promote those prices to consumers in the state. The section defines "personalized algorithmic pricing" as "dynamic pricing set by an algorithm that uses personal data." "Personal data" is broadly defined as "any data that identifies or could reasonably be linked, directly or indirectly, with a specific consumer or device." The law does not consider whether that data was voluntarily provided. 

The law features several noteworthy exceptions. "Personal data" excludes location data used by for-hire and transportation network company vehicles (as defined under local law) solely to assess fares based on mileage and duration. Certain industries are also categorically exempted, including regulated financial institutions and entities regulated under state insurance laws. The Act also does not apply to certain prices offered to consumers with "subscription-based" contracts.

Attorney General Letitia James seems poised to enforce the Act and has already issued a warning to New Yorkers. On November 5, 2025, New York's Attorney General's Office issued a consumer alert encouraging consumers to report companies that fail to display proper algorithmic pricing disclosures through an online complaint form.

The attorney general can send cease-and-desist letters wherever there is "reason to believe that there is an alleged violation," including based on consumer complaints. Targeted companies will receive notice to cure alleged violations within a specific time frame, after which point the attorney general can seek an injunction. Violators can be penalized up to $1,000 for each violation, with no maximum total penalty. Notably, no proof of individual consumer harm or damages is required.