AUGUSTA – Reps. Sally Cluchey, D-Bowdoinham, and Kilton Webb, D-Durham, have 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 Development Committee on Monday.
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.
“Dynamic pricing undermines fair business practices and severely damages consumer trust,” said Cluchey. “With the cost of living having surged in recent years and economic uncertainty still looming, Maine families shouldn't face yet another financial burden. Our residents deserve transparent, consistent pricing when buying essentials or enjoying a simple meal – not algorithms designed to extract maximum profits for large corporations at the expense of everyday consumers.”
“In Maine, we are already facing the impacts of inflation, and the onslaught of federal tariffs is further diminishing our purchasing power,” said Webb. “Dynamic pricing hurts customers in an effort to increase profit margins for the corporations who utilize these intentionally misleading practices. We have an opportunity to pass forward-thinking legislation that will ensure more of Mainers’ hard-earned money stays in their wallets, instead of being siphoned into the bank accounts of greedy corporations.”
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.
Cluchey is serving her second term in the Maine House and represents House District 52, which includes the communities of Bowdoin, Bowdoinham and Richmond. She serves on the Inland Fisheries and Wildlife Committee and the Health Coverage, Insurance and Financial Services Committee.
Webb is serving his first term in the Maine House and represents House District 98, which includes Durham, Pownal and portions of Lisbon, Bowdoin and Topsham. He serves on the Energy, Utilities and Technology Committee.
Contact:
Brian Lee (Cluchey, Webb) | 305-965-2744