HF3408

Purpose

This bill would prohibit a type of price manipulation called surveillance-based price setting by retail food stores. It aims to protect consumers from prices that are tailored to them using data collected by surveillance technology, especially biometric data and facial recognition.

Key definitions (to understand the bill)

• Biometric data: data from automatic measurements of physical characteristics (e.g., fingerprints, voice prints, facial features, iris scans, gait).
• Facial recognition technology: tech that identifies or analyzes a person based on facial features or related data.
• Electronic surveillance technology: tools (sensors, cameras, tracking devices, biometric monitoring) used to observe or collect personal information about a consumer.
• Electronic shelf label: digital price display on a shelf or a digital price tag.
• Personal information: a broad category including race, eye color, addresses, IDs, purchasing history, internet activity, geolocation, financial data, and inferences about preferences or behavior.
• Price: the amount charged for a transaction, including related costs or terms.
• Retail food store: a store that sells food to the public (not including online-only sales).
• Surveillance-based price setting: offering or adjusting a price for an item for a specific consumer or group based on personal information gathered through electronic surveillance tech.

Main provisions and what the bill seeks to accomplish

• Prohibition on surveillance-based price setting (Subd.2):
  • Retail food stores are prohibited from using personal information gathered through electronic surveillance technology (including facial recognition and electronic shelf labels) to set or adjust prices for a consumer or a group.
• Allowed exceptions to the price-setting prohibition (Subd.2):
  • Price differences based solely on reasonable costs of providing the item to different consumers.
  • Discounts offered to members of a group defined by publicly disclosed criteria (e.g., occupation, age, military status, student status) with prices offered uniformly to all who meet the criteria.
  • Discounts or rewards offered to eligible consumers through a loyalty program, with personal information used only to administer the discount/reward and not for other purposes like targeted advertising or surveillance-based pricing.
  • Use of biometric data is allowed if:
  • the consumer voluntarily provides biometric data and is informed in writing about collection, storage, use, and the duration, and
  • the consumer provides a written release authorizing collection/use; and
  • the retailer does not sell or share biometric data with third parties.
• Disclosure and restrictions related to facial recognition (Subd.3):
  • If a retail food store uses facial recognition technology, it must notify consumers in plain, simple language about the technology’s intended purpose and use through signage at the store’s main entrance.
• Electronic shelf labels restriction for large stores (Subd.4):
  • Retail food stores larger than 10,000 square feet are prohibited from using electronic shelf labels unless:
  • prices are changed no more than once per day at a specific time disclosed to all consumers, and
  • a nondigital presentation of the price is used for each item.

Significant changes to existing law

• Adds a consumer privacy protection framework specifically targeting price setting based on surveillance data, effectively banning price discrimination tied to personal information gathered through electronic surveillance.
• Introduces explicit definitions for biometric data, electronic surveillance technology, and facial recognition to clarify what is covered.
• Creates a multi-faceted set of exceptions that allow certain loyalty, group-based discounts, and biometrics under strict disclosure and consent conditions.
• Requires visible signage for any use of facial recognition technology.
• Imposes a new restriction on large retailers (over 10,000 sq ft) regarding the use of electronic shelf labels, mandating limited daily price changes and nondigital price presentation.

How the bill would operate in practice (summary)

• Stores must not price items based on a consumer’s personal data gathered via surveillance tech.
• They may offer certain discounts that are not personalized (e.g., group-based or loyalty program discounts) if conditions are met and data use is limited.
• If facial recognition is used, stores must post clear notices at the entrance.
• Very large stores would be limited in using electronic shelf labels unless they adhere to a fixed daily price-change schedule and provide a nondigital price display.

Relevant terms - surveillance-based price setting - biometric data - facial recognition technology - electronic surveillance technology - electronic shelf label - personal information - retail food store - price - nondigital presentation - loyalty program - group-based discount - disclosure signage