AI Frontier Institute

Trade: consumer goods and services; use of certain algorithms and protected class data to set prices; prohibit. Amends sec. 3 of 1976 PA 331 (MCL 445.903) & adds sec. 3j.

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Senate Bill No. 991 amends Michigan's Consumer Protection Act (1976 PA 331, MCL 445.903) in two main ways. First, it updates Section 3 with gender-neutral language throughout the existing list of unlawful unfair, unconscionable, or deceptive methods, acts, or practices in trade or commerce, and adds a cross-reference to new Section 3j in subdivision (ll). Second, it adds new Section 3j, which prohibits persons engaged in online trade or commerce from using 'personalized algorithmic pricing' to offer prices to consumers based on: (a) the hardware or hardware state of the consumer's online device (with an exception for device repairs, maintenance, or trade-in valuations); (b) the presence or absence of software on the device; (c) geolocation data used to draw inferences about the consumer (with exceptions for real-time demand pricing for immediately provided goods/services and legitimate cost-differential pricing); or (d) 'protected class data'—information identifying characteristics legally protected from discrimination under Michigan or federal law, including ethnicity, national origin, age, disability, sex, sexual orientation, gender identity and expression, pregnancy outcomes, and reproductive health care—if such use withholds a privilege from the consumer or results in a different price than offered to other consumers. Section 3j expressly exempts licensed insurers. Key definitions provided in Section 3j(3) include 'algorithm' (a computational process using a set of rules), 'consumer data' (data identifiable or linkable to a specific consumer or device), 'dynamic pricing' (near-real-time fluctuating pricing, excluding loyalty discounts or retention offers), 'online device' (internet- or wireless-connected physical objects such as laptops, tablets, and smartphones), 'personalized algorithmic pricing' (dynamic pricing set by an algorithm using consumer data that varies among consumers), and 'protected class data.'

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