New Jersey Enacts First-in-the-Nation Private Right of Action for Surveillance Pricing

Executive Summary

• What’s new: Gov. Mikie Sherrill signed New Jersey’s Fair Price Protection Act on July 23, 2026, making New Jersey the third state to restrict surveillance pricing and the first to give consumers a private right of action to enforce it, including in a class action.
• Why it matters: Covered retailers and delivery platforms now face private and class action exposure when they use consumers’ personal data to set personalized prices.
• What to do next: Retailers and delivery platforms in New Jersey should begin preparing for compliance now and treat pricing-data governance as litigation risk management, not merely a regulatory compliance exercise.

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What Is Surveillance Pricing?

Surveillance pricing refers to the practice of using a consumer’s personal data — including online browsing activity, precise location, purchase history, device information and inferred demographic characteristics — together with algorithms or automated systems to set an individualized price for that specific consumer.

Surveillance pricing is distinct from ordinary price fluctuation. A storewide sale or a demand-based surge price (like those used by ride-hailing platforms) changes the price for everyone; surveillance pricing changes the price for a specific individual based on what a system has learned about that individual.

Overview of the Fair Price Protection Act

On July 23, 2026, New Jersey Gov. Mikie Sherrill signed the Fair Price Protection Act (the Act), making New Jersey the third state to restrict surveillance pricing and the first to give consumers a private right of action to enforce it, including in a class action.

Scope

The Act applies to the sale of “groceries and other foodstuffs,” a term defined broadly to include dairy products, meat and delicatessen products, produce, seafood, beverages, snack foods, candy, baked goods, paper products, household cleaning items, health and beauty products, frozen foods, pet food and supplies, and other edible products.

The Act appears to reach grocery retailers and third-party delivery platforms operating in New Jersey.

Prohibited Conduct

The Act makes it a violation of the New Jersey Consumer Fraud Act for any person to use surveillance pricing, or any other pricing strategy that determines or varies the sale price of groceries and other foodstuffs based, in whole or in part, on personal data.

“Surveillance pricing” in the Act is defined as a pricing strategy in which price is determined, adjusted, optimized or recommended by an algorithm or automated system based on personal data and that results in price variation for individual consumers or groups of consumers.

The Act separately prohibits the use of electronic shelving labels connected to any technology that employs surveillance pricing or similar personal-data-based pricing strategies. It also imposes a one-year moratorium on the deployment of new electronic shelf labels, though retailers may continue to operate, repair and replace existing labels.

Compliance Timeline

The Act takes effect on the first day of the 13th month following the date of enactment. Because Gov. Sherrill signed the Act on July 23, 2026, the effective date is August 1, 2027.

Private Right of Action

The Fair Price Protection Act has a private right of action. New Jersey is the first state to enact a surveillance pricing law that allows consumers to bring lawsuits, rather than leaving enforcement exclusively to the state attorney general (state AG).

Any individual consumer who believes a retailer charged them more than other customers for identical groceries because of their personal data may file a civil suit under the New Jersey Consumer Fraud Act, seeking actual monetary damages, and can bring a class action. If a plaintiff can show that the defendant acted willfully, the statute allows recovery of treble damages — three times the consumer’s actual harm.

The state AG may also bring a civil action to enjoin violations, enforce compliance and obtain actual monetary damages or $50,000 for each violation, whichever is greater.

Statutory Exceptions

The Act excludes three categories of pricing conduct from the surveillance pricing prohibition, each subject to specific conditions:

Cost-based price differences. A retailer may charge different prices based on reasonable costs associated with providing groceries to different consumers, as long as a given price is not changed more than once in a 24-hour period.

Bona fide discounts for broadly defined groups. A retailer may offer a discount when eligibility conditions are publicly and conspicuously disclosed and uniformly applied to any member of a broadly defined group, e.g., teachers or senior citizens. The Act defines a “bona fide discount” as a price lower than the price at which the product is regularly offered.

Loyalty programs. A bona fide discount offered as part of a loyalty program — including programs offering discounts or coupons based on purchase history — is permitted only if four conditions are satisfied: (i) consumer enrollment is voluntary and opt-in; (ii) all program members receive uniform pricing benefits; (iii) the program provides clear and conspicuous disclosure of all pricing benefits, discounts and data practices to participants; and (iv) the program discloses all pricing benefits, discounts and data practices to the public.

The Broader State Regulatory Landscape

New Jersey’s law arrives amid a rapidly developing multistate patchwork. More than 50 surveillance pricing bills are pending across 26 states.

Maryland’s Protection From Predatory Pricing Act, signed April 28, 2026, prohibits food retailers and third-party delivery services from using surveillance pricing to set higher prices for consumers using their personal data. It was the first bill restricting surveillance pricing to become law.

Connecticut’s law, signed May 27, 2026, covers all retailers rather than only grocers and delivery services, and pairs the pricing ban with a mandatory point-of-sale disclosure requirement.

New York already has a disclosure-only surveillance pricing law that has been in effect since November 2025, requiring businesses to notify consumers when an algorithm using personal data sets their price. The Legislature has also passed a bill that would ban surveillance pricing; it is awaiting Gov. Kathy Hochul’s signature.

Key Considerations for Retailers

Audit pricing systems. New Jersey food retailers should map how their prices are generated — in-store, online and through delivery platforms — and determine whether individual-level personal data feeds into those calculations.

Scrutinize loyalty program mechanics. New Jersey food retailers should confirm that loyalty programs are opt-in, provide uniform benefits to all members and include clear, conspicuous, public disclosures of pricing benefits and data practices.

Pause new electronic shelf label rollouts. Retailers should suspend planned new electronic shelf label deployments in New Jersey during the moratorium described above.

Prepare for litigation exposure, not just regulatory risk. Given the private right of action described above, retailers should treat pricing-data governance as litigation risk management, not merely a regulatory compliance exercise. This includes documenting pricing methodologies, vendor relationships and the specific personal data inputs (if any) used in pricing decisions.

Track the multistate patchwork. Retailers operating beyond New Jersey should monitor the enforcement of — and judicial decisions interpreting — enacted surveillance pricing laws in Maryland and Connecticut, as well as pending legislation elsewhere (including New York). In addition, retailers should anticipate that compliance frameworks built for New Jersey’s private right of action may become the baseline for a national pricing compliance program.

This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.