Advertising Law Blog

New York’s Algorithmic Pricing Disclosure Act is now in effect (as of November 10, 2025). (Read our coverage of the law in our June 25, 2025 Advertising Law Blog post.) Originally enacted in May as part of the state’s 2025-2026 omnibus budget bill, the law's effective date was delayed due to a failed legal challenge in the United States District Court for the Southern District of New York by the National Retail Federation, who alleged that the Act’s mandatory disclosure requirement violated the First Amendment and sought a preliminary injunction.

The law mandates that any use of dynamic pricing determined by an algorithm, which utilizes a consumer's personal data (including a consumer’s location, income, and previous shopping habits), must include a clear and conspicuous statement at or near the stated price, reading, “THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA.”

There are several exceptions to this provision, including when the price that is offered to a consumer who has an existing subscription-based contract is less than the price for the same goods or service set forth in the subscription-based contract for a new customer. However, the requirement to include this unique disclosure will have wide-ranging implications and businesses failing to comply with the law can face a $1,000 penalty per violation, which means that each instance may count as a separate violation.

Such pricing programs are often used on businesses’ apps or as part of loyalty programs, where consumers may receive an individualized discount offering a different, personalized price. Given the borderless nature of ecommerce, this law is set to have a significant national impact. Businesses should carefully review their practices to ensure compliance.