AI Frontier Institute

Enacts the "fair cart act"; establishes safeguards against deceptive algorithmic pricing practices; outlines permitted pricing practices and safe harbors; requires consumer pricing transparency; provides for compliance guidance and enforcement and educational outreach.

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The 'Fair Cart Act' (Assembly Bill 11599) amends New York's General Business Law by adding a new Article 22-C to regulate algorithmic pricing systems used by retailers, online marketplaces, delivery platforms, and other covered entities. Under Section 350-p, covered entities are prohibited from using algorithmic pricing to secretly raise prices above a baseline public price based on personal data, inferred economic status, geolocation, or behavioral profiling without clear and conspicuous disclosure; from engaging in unfair individualized price inflation; from misrepresenting how prices are determined; or from falsely presenting a personalized price as universally available. Section 350-q establishes broad safe harbors explicitly permitting loyalty programs, coupons, dynamic pricing tied to supply and demand, electronic shelf labeling, app-based promotions, and any algorithmic system used solely to provide discounts or consumer savings. Covered entities are not required to disclose proprietary algorithms or trade secrets. Section 350-r requires covered entities to clearly disclose when prices are materially personalized or when personal data materially influences pricing, and to provide all mandatory fees before a transaction is completed. Section 350-s grants enforcement authority to the Division of Consumer Protection and the Office of the Attorney General, requires a 30-day cure notice before civil enforcement, and caps civil penalties at $10,000 per knowing violation, with penalty factors including intent, consumer harm, and good-faith compliance efforts. Section 350-t directs the Division of Consumer Protection to develop consumer education materials and may convene industry and academic stakeholders to create voluntary best practices. The act takes effect 180 days after enactment.

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