AI Frontier Institute

SURVEILLANCE-BASED PRICING

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Illinois HB4985, the Surveillance-Based Price Discrimination Act (Section 1), prohibits any person from using 'surveillance data' as part of an 'automated decision system' to set individualized prices for goods or services charged to consumers (Section 10(a)). Surveillance data is broadly defined in Section 5 to include data derived from observation, inference, or surveillance related to personal characteristics, behaviors, or biometric information. Automated decision systems include AI, machine learning, and statistical tools used to assist or replace human decision-making. Exemptions under Section 10(b) cover insurers complying with the Illinois Insurance Code using risk-relevant data, and entities declining credit or transactions based on Fair Credit Reporting Act-compliant consumer reports. Different pricing based solely on the actual cost of providing a good or service is also permitted. The Attorney General enforces the Act (Section 15) and may impose civil penalties up to $10,000 per violation, with each affected consumer or transaction counted separately. Private individuals may sue under Section 20 for actual damages, $3,000 per violation, or triple damages with clear and convincing evidence of bad faith or intentional violation. The Act does not preempt other legal rights or remedies (Section 25), and the Attorney General may adopt rules to implement the Act (Section 30).

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