Privacy & Information Security Law Blog

On January 27, 2026, Data Privacy Day, the California Office of the Attorney General (“California OAG”) announced an investigative sweep into surveillance pricing, a type of algorithmic pricing that uses personal information, such as browsing history and location, to set individualized prices. Unlike demand-based dynamic pricing, surveillance pricing is based on consumer data and may result in two shoppers seeing different prices for the same item at the same time from the same seller.

The investigative sweep focuses on potential violations of the California Consumer Privacy Act (“CCPA”). Under the CCPA, personal information may be used only for purposes consistent with consumers' reasonable expectations. Accordingly, a business could be in violation of the CCPA if it uses personal information for a secondary purpose that consumers would not reasonably expect. In its press release, the California OAG cautioned that using personal information to set prices, especially without providing clear disclosures, may exceed what consumers expect when providing their personal information to businesses.  

The California OAG has indicated that the investigative sweep specifically will target businesses operating in the retail, grocery, and hospitality sectors.

In connection with the investigative sweep, the California Department of Justice is sending letters to businesses in these sectors requesting information about their use of consumer personal information to set the prices of goods or services, including commercial information (such as records of products or services purchased, obtained, or considered), internet browsing history, location data, demographic data, and inferences drawn from personal information collected.

The letters also seek information about:

• the businesses’ policies and public disclosures regarding personalized pricing;
• any pricing experiments undertaken by the businesses; and 
• any measures the businesses are taking to comply with algorithmic pricing, competition, and civil rights laws. 

States are increasingly scrutinizing personalized algorithmic pricing as part of their consumer protection and AI governance efforts, with New York and California at the forefront. New York has enacted legislation regulating algorithmic pricing, and is actively enforcing it as reflected by its recent request for information from Instacart on the use of algorithmic pricing in the grocery business.