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Legislation Document
SPONSOR:
Rep. Chukwuocha & Sen. Mantzavinos
Reps. Osienski, K. Johnson, Romer, Morrison, Harris; Sens. Lockman, Pinkney, Lawson
HOUSE OF REPRESENTATIVES
153rd GENERAL ASSEMBLY
HOUSE BILL NO. 453
AN ACT TO AMEND TITLE 6 OF THE DELAWARE CODE RELATING TO CONSUMER PROTECTION AND SURVEILLANCE BASED PRICING DISCRIMINATION.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Chapter 25S, Title 6 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
Chapter 25S. Surveillance Pricing
§ 2501S. Definitions.
As used in this chapter:
(1) “Automated decision system” means a system, software, or process that uses computation, including machine learning, statistics, or artificial intelligence, the result of which is used to assist or replace human decision-making.
(2) “Biometrics” means data generated by the technological processing or analysis of an individual’s biological, physical, or behavioral characteristics, including fingerprints, voiceprints, or facial geometry.
(3) “Consumer” means an individual who is a resident of the State. “Consumer” does not include an individual acting in a commercial or employment context or as an employee, owner, director, officer, or contractor of a company, partnership, sole proprietorship, nonprofit organization, or government agency.
(4) “Electronic surveillance technology” means the use of technological methods, systems, or tools including sensors, cameras, device tracking, biometric monitoring, and other forms of observation or data collection, capable of gathering information about a consumer’s behavior, characteristics, location, and other personal attributes.
(5) “Individualized” means specific to or inferred about an individual or a specific group or tier of individuals.
(6) “Merchandise” has the meaning given in subchapter II of chapter 25.
(7) “Online activity” means an individual’s observable or inferred actions, habits, preferences, interests, or vulnerabilities, including web browsing history, online application usage, proxy data location data, purchase history, financial circumstances, and metadata derived from an individual’s interaction with a digital interface.
(8) “Price” means the amount charged to a consumer, including all related costs, fees and material terms impacting the value of the transaction.
(9) “Protected class data” means information about an individual, or groups of people, that directly, in combination, or by implication identifies a characteristic, including ethnicity, national origin, immigration status, age, disability, sex, sexual orientation, gender identity and expression, pregnancy outcomes and reproductive health care, or any other characteristic that is legally protected from discrimination under the laws of the State or under federal law.
(10) “Proxy data” means device identifier such as browser specifications, clickstream patterns, or engagement metrics that can be used to infer a consumer’s socioeconomic status, protected class data, or urgency of purchase.
(11) “Sale” has the meaning given in subchapter II of chapter 25.
(12) “Surveillance data”
means data obtained through electronic surveillance technology or data obtained through observation, inference, or surveillance of a consumer related to personal characteristics, behaviors, online activity, or biometrics.
(13) “Surveillance-based price discrimination” means using an automated system to inform, set, or establish individualized prices based, in whole or in part, on surveillance data.
§2502S. Prohibition against surveillance-based price discrimination.
(a) It is an unlawful practice for a person to use or employ surveillance-based price discrimination in connection with the sale, lease, receipt or advertisement of any merchandise.
(b) A person has not engaged in surveillance-based price discrimination if the person can demonstrate any of the following:
(1) The differential prices are justified by actual differences in the cost of providing the good or service.
(2) The differential prices reflect status-based discounts offered to all consumers who meet lawful, objective criteria, including military, students, teachers, veterans, or seniors, provided that the criteria do not serve as a proxy for a protected class.
(3) The differential prices reflect a loyalty or rewards program discount, provided that the discount is uniform for all members of the program and is not individualized based on an automated decision system’s analysis of a member’s specific surveillance data.
(4) The person is an insurer using risk-relevant data in compliance with Title 18.
(5) The price is based on data provided in a consumer report used in compliance with the federal Fair Credit Reporting Act.
(6)
The price is established using location data solely to calculate mileage, distance, or trip duration by a for-hire vehicle or delivery service.
(c) This chapter shall not apply to any of the following:
(1) The pricing of financial services.
(2) Data used in relation to price, route, or service, as such terms are used in the Airline Deregulation Act, 49 U.S.C. § 40101, et seq., as amended, by an air carrier subject to said act, to the extent any part of this chapter is preempted by the Airline Deregulation Act, 49 U.S.C. § 41713, as amended.
§ 2503S. Penalties and enforcement.
(a) Any violation of the provisions of this chapter shall be deemed an unlawful practice under § 2513 of this title and a violation of subchapter II of chapter 25 of this title.
(b) In addition to other remedies provided by law or equity, any person aggrieved by a violation of this chapter may bring a civil action on behalf of themselves or a group of similarly situated persons in a court of competent jurisdiction to restrain further violations and to recover:
(1) Actual damages, or $3,000 per violation, whichever is greater.
(2) Treble damages if the defendant is found to have acted in bad faith or with willful intent.
(3) Reasonable attorney’s fees and costs to a prevailing plaintiff.
(c)
The remedies provided for in this chapter are not exclusive, and are in addition to any other procedures, rights, or remedies which exist with respect to any other provision of law.
SYNOPSIS
This Act prohibits surveillance-based price discrimination by forbidding the use of automated decision systems to set individualized consumer prices based on personal data, metadata, or proxy data, such as device identifiers and digital behavioral patterns, used to infer a consumer's socioeconomic status or urgency of purchase. While the Act establishes safe harbors for discounts based on lawful, objective criteria (e.g., military, student, or senior status), it ensures that rewards and loyalty programs are not used to circumvent these protections by requiring that such discounts remain uniform across membership and are not individualized through algorithmic profiling.
This Act may be enforced by the Department of Justice, as an unlawful practice under § 2513 of Title 6. The Act also provides consumers with a private right of action to recover actual damages or $3,000 per violation, whichever is greater, alongside potential treble damages for willful intent.