The state capitol building is seen in Springfield. (CNI file photo)
Article Summary
- Two bills introduced in the house would require companies to tell consumers when their personal data is used in price setting.
- Known as algorithmic pricing, the practice has come under fire recently for anticompetitive tactics.
- Industry groups argue the practice benefits consumers by delivering competitive prices and enhanced cost reductions.
This summary was written by the reporters and editors who worked on this story.
As top legislators emphasize affordability this session, several lawmakers are taking aim at regulating algorithmic pricing that uses consumers’ personal data.
Algorithmic pricing is a price-setting practice where companies use everything from mouse movements to website searches and messages to set unique, individualized prices using an algorithm.
House Bill 4248, co-sponsored by Reps. Kam Buckner, D-Chicago, and Maura Hirschauer, D-Batavia, would require corporations to disclose the use of algorithmic pricing and give consumers the chance to opt out. House Bill 4544, sponsored by Rep. Eva Dina Delgado, D-Chicago, would only require disclosure.
Algorithmic pricing is a “modern tool for an age-old tactic,” to raise prices, said Erion Malasi, director of policy and research for Economic Security Illinois.
“Back in the day, business leaders would have gotten in a smoke-filled room together and decided not to drop their prices below a certain benchmark,” Malasi said. “In modern times, they’re not. … They can just feed all their information into an algorithm.”
The practice is widespread, Malasi added. It’s been used in housing, online retail, airlines, fast food, rideshares and more.
“Disclosure is a great first step in order to really expose just how prevalent this is in the economy,” Malasi said of the proposed legislation.
The bills have both been introduced and are awaiting committee hearings.
Algorithmic pricing legislation
Delgado’s bill would require companies that use an individual’s personal data — defined as any data that identifies or could be linked with a specific person, excluding location — to disclose that the price was set using that data.
“Affordability is an issue that I keep hearing about every day when I’m in the district talking to folks,” Delgado said. “We’re protecting consumers, because at the end of the day, if there are secret price hikes that are happening that you can’t see, then it’s very hard for you to be a consumer.”
California and New York have both passed laws regulating algorithmic pricing, with California banning the practice in some cases.
The idea behind disclosure is that transparent prices allow consumers to shop responsibly, Delgado said. Banning the use of personal data entirely could tamper with loyalty programs and discounts, but transparency discourages predatory pricing, she added.
The bill also excludes insurers and financial institutions from the required notice because those industries are already highly regulated, Delgado said.
Buckner’s bill requires companies to disclose the use of consumer-linked information, including browsing history, geolocation data and demographic profile data in price setting.
The bill would also give consumers the opportunity to opt out of personalized prices.
“I think disclosure is a start to at least see that, you know, people know. They can then make decisions with their dollars and decisions with where they’re buying things,” Buckner said.
This disclosure must state that the price is personalized, identify what data was used and provide an explanation of how the company uses algorithmic pricing.
“People are using algorithms for everything and, you know, companies are using data, your clicks, your location, your device, who you are, your shopping history, even your inferred income to show different people, different prices for the same thing,” Buckner said. “It can be personalized pricing for consumers or rent setting software in housing. Either way, it quietly turns affordability into a real game.”
HB4248 also bans companies from using data on race, religion, sexual orientation, immigration status, medical information and criminal history when setting prices.
Anticompetitive history
There are different types of algorithms companies can use, but some use third-party platforms that analyze and communicate with other companies to recommend prices to the user. Malasi says these platforms engage in anticompetitive behavior that raises consumer costs.
“At the end of the day, algorithmic pricing is cooperation,” Malasi said. “It’s collusion between corporations, and when big corporations, when landlords are cooperating with each other, we do not get a competitive economy. We don’t get an affordable economy.”
Opponents of pricing regulation — namely retailers and industry groups for those who use algorithmic pricing — argue that the practice benefits consumers by delivering competitive prices and enhancing cost reductions, according to Alec Laird, senior vice president of government relations for the Illinois Retail Merchants Association.
“It’s important to recognize that retailers are hyper-focused on maintaining competitive, fair, and transparent pricing — an essential factor in attracting and retaining customers. In today’s marketplace, where consumers have endless options, those conditions are essential, as shoppers will quickly turn elsewhere if those expectations aren’t met,” Laird said in a statement.
In January 2025, Attorney General Kwame Raoul joined a civil antitrust lawsuit against RealPage Inc. and five landlord companies, alleging that through pricing algorithms on RealPage, the landlords set rental pricing using sensitive information from the other companies.
The case, which included nine other attorneys general and the U.S. Department of Justice, was settled in November 2025.
Algorithmic pricing is dangerous, Malasi says, because it doesn’t lower prices as it claims to, and instead removes competition by allowing companies to set prices together.
“(Business leaders) can just feed all their information into an algorithm, into some software that will tell them, you know, what prices they can all agree to and drive up their revenue without having to respond to market downturns or other factors that they normally would,” Malasi said. “It removes competition from the equation.”
Laird said the IRMA is concerned that pricing regulation would have the opposite effect by cutting cost-lowering practices.
“Efforts to regulate retail pricing often reflect an incomplete understanding of how modern pricing systems operate — particularly the distinction between the displayed price and the discounts that may be available to individual customers through coupons, loyalty rewards, temporary promotions, price-checking, or other pro-consumer incentives,” he said.
Delgado and Buckner emphasized that disclosure was a first step in the process, but that they were open to discussion about the best version of their individual bills.
“We’ve talked a lot about affordability, you know, being it’s going to be one of our focuses this year,” Buckner said. “And so we’ve got to be smart by how we address this and do something about it in a way that’s proven.”
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