As the 2026 legislative season intensifies, Pennsylvania has become a battleground for the future of digital retail. While the Ecommerce Innovation Alliance (EIA) shares the goal of ensuring a fair and transparent marketplace, a new proposal in Harrisburg—House Bill 1942, also known as the “Surveillance Pricing Act”—threatens to fundamentally disrupt the very tools that allow small and medium-sized ecommerce businesses to compete and thrive.

Earlier today, EIA President & CEO David Carter submitted a formal letter to the Pennsylvania House Committee on Consumer Protection, Technology and Utilities, outlining EIA’s opposition to the bill as currently drafted. 

In this post, we explore what HB 1942 means for your business, the national context of “surveillance pricing,” and why the EIA is working to help legislators better understand modern, anti-discriminatory marketing practices and fighting to avoid unintended consequences that could disrupt ecommerce businesses across the country.

What is Surveillance Pricing?

The term “surveillance pricing” has recently entered the regulatory lexicon to describe the use of personal data—such as a user’s location, browsing history, or device type—to set individualized prices for products or services.  This often extends not just to the price that is displayed to the consumer, but to the specific discounts and promotions that a consumer is offered in order to incentivize the individual to complete a purchase.

Regulators, including the Federal Trade Commission (FTC) and authorities in states like California, New York, and Massachusetts, have raised concerns that these practices could lead to “price discrimination,” where different consumers are charged different prices based on a variety of characteristics, including their perceived “willingness to pay.”

While organizations like Consumer Reports have come out in strong support of HB 1942, framing it as a necessary shield for consumers, the EIA believes the current draft of the bill fails to distinguish between truly discriminatory practices, in which decisions are made based on or as a proxy for protected categories, such as age, gender, race, religion, national origin, or sexual orientation/gender identity, and the legitimate, helpful personalization that modern consumers have come to expect.

A Fragmented National Regulatory Map

Pennsylvania is not acting in a vacuum. Since the beginning of 2025, more than 50 bills aimed at data-driven pricing have been introduced across at least 25 states. While many are still being debated, a significant number of laws are already in effect, creating a complex compliance landscape for any merchant selling across state lines.

• Enacted Laws and Active Enforcement:
  • New York: On November 10, 2025, the Algorithmic Pricing Disclosure Act officially took effect. It is the first law of its kind, requiring businesses to be transparent by displaying a clear disclosure—“THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA”—whenever individualized pricing is used.
  • California: Effective January 1, 2026, Assembly Bill 325 prohibits the use of “common pricing algorithms” that rely on competitor data to align or fix prices. Simultaneously, the California Attorney General is utilizing existing authority under the California Consumer Privacy Act (CCPA) to conduct broad investigative sweeps into “surveillance pricing” to ensure companies aren’t exceeding their data-use permissions.
• Proposed Legislation and Federal Initiatives:
  • The Federal Government: In December 2025, the “One Fair Price Act” was introduced in the U.S. Senate. This bill seeks to outlaw surveillance pricing nationwide by prohibiting companies from customizing prices based on an individual’s biometrics, location, or browsing history.
  • Other States: A growing number of states, including Virginia, Maryland, Illinois, Hawaii, and Massachusetts, have introduced bills that are currently under consideration. These range from total bans on “surveillance-based” price setting to sector-specific rules for grocery and essential retail.

Pennsylvania’s HB 1942 sits among these proposed measures but is particularly aggressive in its use of vague language and terminology that could be interpreted to prohibit a variety of common marketing practices. It doesn’t just ask for transparency; it places strict limits on how data can be used to offer discounts and requires businesses to “uniformly offer” prices in a way that could dismantle many common ecommerce strategies.

The EIA’s Opposition

In his letter to the House Committee, David Carter made it clear: while we support protecting consumers, HB 1942 is not narrowly tailored to prohibit actual discrimination, but rather is overly broad and will ultimately harm the very people it intends to protect.

Here are the key concerns the EIA has raised regarding the bill:

1. The Threat to “Personalization-at-Scale”

Modern ecommerce relies on data to provide a relevant experience. HB 1942 would treat legitimate personalization—like offering a discount to a first-time visitor or a loyalty reward to a frequent buyer—as a form of “surveillance.” If businesses cannot use data to tailor their offers, the shopping experience becomes generic and less valuable for the consumer.

2. The “Uniformity Trap” and Trade Secrets

Section 3(d) of the bill requires that any discount be “uniformly offered” to all eligible consumers. This ignores how small businesses actually grow. By forcing businesses to disclose the proprietary algorithms they use to identify high-intent shoppers or manage inventory, the bill effectively strips them of their competitive advantage and compromises trade secrets.

3. The Death of Retention Marketing

One of the most concerning aspects of HB 1942 is Section 3(e), which mandates that any data collected to provide a discount must be used solely for that specific transaction and then deleted. With the cost of acquiring new customers at an all-time high, small ecommerce brands rely on “retention marketing” to survive. This bill would effectively limit a customer’s lifespan to a single transaction, making it nearly impossible for small businesses to build long-term relationships.

4. Unintended Consumer Harm

If ecommerce businesses cannot optimize their revenue through smart, personalized pricing, they are forced to raise “base prices” for everyone to cover their costs. Furthermore, popular programs like “Subscribe & Save” or personalized coupons could disappear under these rigid rules.

What This Means for Ecommerce Business Owners

For our members, HB 1942 represents a significant operational risk. If passed, you may face:

• Increased Compliance Costs: The need for expensive legal and technical audits to ensure every discount is “uniform.”
• Platform Limitations: Standard ecommerce tools and plugins that utilize dynamic data may be disabled for Pennsylvania customers to avoid liability.
• Market Consolidation: While large conglomerates have the resources to navigate these rules, small and medium-sized businesses are the ones who will feel the squeeze, potentially leading to further market dominance by a few giant players.

Looking Ahead

UPDATE: Due to the PA Governor’s Budget Address tomorrow and related Committee meetings, the Informational Meeting on Surveillance Pricing originally planned for Tuesday, February 3, 2026 has been canceled. At this time, it has not been determined when, or if, this meeting will be rescheduled.

The Ecommerce Innovation Alliance remains a vocal advocate for our members. We believe there is a way to address consumer privacy without stifling the innovation that has made the US ecommerce market the most vibrant in the world.

We cannot support HB 1942 in its current form, and we will continue to work with stakeholders to push for revisions that protect personalized commerce. We encourage our members to stay informed and engaged as this bill moves through the legislative process.

Join the EIA today to help strengthen and shape policies that affect all ecommerce businesses. Together, we can continue to create the future of ecommerce. Subscribe to EIA email updates to stay informed on key developments and their impact on your business.