AUGUSTA – Rep. Holly Eaton, D-Deer Isle, has co-sponsored legislation that would prevent Maine grocery stores and restaurants from using dynamic pricing –- a form of price gouging in which businesses increase their prices during peak demand hours. The bill, LD 1597, had a public hearing before the Legislature’s Housing and Economic and Development Committee yesterday, May 12.
Under this bill, grocery stores like Hannaford and Shaw’s would be prohibited from intentionally surging prices during their busiest times, like during the hours of 4-7 p.m. on weekdays when many people stop by to pick up food for dinner after work. Fast food chains like Wendy’s and McDonald’s would also be prohibited from charging extra based on popular time windows for customers.
“I want to start by making one thing very clear for my constituents: this bill does not affect seafood pricing. Traditional market pricing—like what we use for lobster—is protected in the bill. That’s something I looked at carefully before agreeing to cosponsor this bill,” said Eaton. “I support this proposal because I believe Mainers deserve fair and honest prices when they walk into a grocery store or order a meal. People should be able to see a price and trust that it’s the same price for the next customer. Unfortunately, we’re seeing new technology being used in ways that quietly adjust prices based on factors the average person doesn’t even see—things like time of day, weather or shopping habits.”
The use of dynamic pricing has increased rapidly over the last few years. Corporations like Kroger and Walmart have already been criticized for their use of electronic shelf labels (ESLs), which allow businesses to digitally display and adjust the price of a product based on location and demand. Additionally, the Federal Trade Commission has called for companies to provide transparency in their use of surveillance pricing, a form of dynamic pricing that utilizes artificial intelligence – including facial recognition – to adjust costs based on individualized information.
The bill defines dynamic pricing as “The practice of causing a price for a good or a product to fluctuate based upon demand, the weather, consumer data or other similar factors including an artificial intelligence-enabled pricing adjustment.” It does not include discounts, specials or market pricing for goods or products traditionally set by market conditions, such as seafood.
Under the proposal, a Maine business found to be actively utilizing dynamic pricing would be subject to the Maine Unfair Trade Practices Act, which is enforced by the Maine’s Attorney General's Office.
Eaton is serving her second term in the Maine House and represents the communities of Brooklin, Deer Isle, Eagle Island Township, Frenchboro, Southwest Harbor, Stonington, Swan’s Island, Tremont, Isle au Haut and Vinalhaven. She serves as a member of the Marine Resources Committee and the Transportation Committee.
Contact:
Brian Lee (Eaton) | 305-965-2744