AUGUSTA – Rep. Parnell Terry, D-Gorham, 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 had a public hearing before the Legislature’s Housing and Economic and Development Committee on Monday, May 12.
LD 1597 would prohibit grocery stores like Hannaford and Shaw’s 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.
“This legislation will help everyday Mainers who are already being hurt by the rising cost of living,” said Terry. “LD 1597 protects consumers by preventing corporations from taking advantage of them by using new technology to engage in this type of price gouging.”
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 (ESL), 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.
Rep. Terry is serving his first term in the Maine House and represents part of Gorham. Terry is a member of the Inland Fisheries and Wildlife Committee and the Veterans and Legal Affairs Committee.
Contact:
Brian Lee (Terry) | 305-965-2744