ALGORITHMIC PRICE TRANSPARENCY

Illinois General Assembly - Full Text of HB4248

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Full Text of HB4248

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HB4248 - 104th General Assembly

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HB4248 Engrossed
LRB104 16598 SPS 29998 b
1

AN ACT concerning business.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 1.
Short title.
This Act may be cited as the
5
Algorithmic Pricing Prohibition Act.

6

Section 5.
Legislative findings.
The General Assembly
7
finds and declares:
8

(1) Consumers increasingly purchase goods and services
9

from businesses that collect and process browsing
10

behavior, geolocation data, purchase history, and other
11

personal data.
12

(2) Businesses use automated systems and data-driven
13

algorithms to generate prices that may vary among
14

consumers for the same goods or services.
15

(3) These practices, sometimes referred to as
16

"surveillance pricing", may limit a consumer's ability to
17

comparison-shop and may enable pricing based on a
18

consumer's perceived willingness to pay.
19

(4) Prohibiting these practices is necessary to
20

promote fair dealing, consumer protection, and market
21

integrity.

22

Section 10.
Definitions.
In this Act:

HB4248 Engrossed
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1

"Algorithmic pricing" means a price for consumer goods or
2
services generated, in whole or in part, using an automated
3
decision system, machine-learning model, or data-driven
4
algorithm.
5

"Consumer" means a natural person who is an Illinois
6
resident acting only in an individual or household context.
7

"Covered entity" means any person or entity that sells or
8
offers to sell consumer goods or services to consumers in this
9
State.
10

"Personal data" means information linked or reasonably
11
linkable to a specific consumer, including, but not limited
12
to, browsing history, search queries, geolocation data, prior
13
purchases, digital identifiers, or demographic profile data.
14

"Personalized price" means a price for consumer goods or
15
services that is set for a consumer based on the consumer's
16
personal data.
17

"Surveillance pricing" means algorithmic pricing that uses
18
a consumer's personal data to generate a personalized price.

19

Section 15.
Surveillance pricing prohibition.
A covered
20
entity shall not engage in surveillance pricing.

21

Section 20.
Application of law.
22

(a) This Act does not apply to price changes that are the
23
result of:
24

(1) fluctuations in the cost of acquiring, producing,

HB4248 Engrossed
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LRB104 16598 SPS 29998 b
1

transporting, or distributing inventory, including, but
2

not limited to, changes in wholesale prices, manufacturing
3

costs, labor, insurance, or other input costs associated
4

with providing goods or services to different consumers;
5

(2) objective cost differences directly related to the
6

provision, supply, or sale of goods or services to
7

consumers in different geographic areas, market regions,
8

or delivery locations, including, but not limited to,
9

reasonable variations reflecting the costs or conditions
10

associated with serving particular areas or responding to
11

differing levels of supply or demand;
12

(3) supply chain disruptions, including, but not
13

limited to, delays, shortages, allocation by suppliers,
14

changes in shipping modes or routes, or other logistical
15

constraints that reasonably affect the seller's costs or
16

available quantities;
17

(4) time-limited sales, promotions, or discounts that
18

are offered in good faith and in the usual course of the
19

seller's business, including introductory pricing,
20

seasonal or clearance sales, and advertised promotional
21

events;
22

(5) the imposition, repeal, or adjustment of any tax,
23

fee, surcharge, or assessment imposed by federal, State,
24

or local law, or any pass-through of such amounts to the
25

consumer;
26

(6) variations in shipping, delivery, or handling

HB4248 Engrossed
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LRB104 16598 SPS 29998 b
1

costs, including fuel surcharges and carrier rate changes,
2

and any pass-through of such costs to the consumer;
3

(7) application of any discounts, coupons, promotional
4

offers, rebates, limited-time sales, loyalty or club
5

member pricing, price comparison tools, competition price
6

matching or other reductions or incentives offered to the
7

consumer, including differentiated pricing based on
8

participation in the programs, or accumulation or
9

redemption of rewards;
10

(8) special discount programs, including
11

differentiated pricing offered to individuals who meet
12

publicly disclosed eligibility criteria, such as teachers,
13

employees, active-duty or retired military personnel,
14

senior citizens, and students;
15

(9) any fees, surcharges, or other charges that are
16

imposed or set by third parties, including payment
17

processors, delivery platforms, or other intermediaries,
18

and any pass-through of such amounts to the consumer;
19

(10) differential prices that are offered or provided
20

to a consumer as a good faith credit, refund, rebate, or
21

discount issued in response to:
22

(A) a service disruption, error, or other failure
23

to deliver a good or service as promised or expected;
24

(B) a billing dispute or discrepancy;
25

(C) a request for account retention or
26

cancellation; or

HB4248 Engrossed
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LRB104 16598 SPS 29998 b
1

(D) any other customer service interaction in
2

which the person provides a credit, refund, rebate, or
3

discount to address a consumer's concerns or to
4

maintain the consumer relationship.
5

(b) This Act does not apply to algorithmic pricing models
6
that do not use personal data, including models based on
7
aggregate market demand, which includes changes in market
8
demand, competitive conditions, and the seller's cost
9
structure.
10

(c) This Act does not apply to the use of consumer personal
11
data for purposes of determining creditworthiness or
12
underwriting a consumer's ability to repay.
13

(d) This Act does not apply to the pricing of any contract
14
or policy of insurance that is subject to rules regarding
15
pricing to consumers adopted by the Department of Insurance,
16
including a surety contract, a dental service plan, a health
17
care plan, a limited health care plan, or a voluntary health
18
services plan.
19

(e) This Act does not apply to any provider of financial
20
services, including a financial institution, a financial
21
institution affiliate, a broker-dealer, a registered
22
investment advisor, or an entity that provides consumer credit
23
products, such as credit cards, personal loans, and mortgages,
24
that is subject to rules adopted by the Department of
25
Financial and Professional Regulation or rules or regulations
26
adopted by any federal financial regulatory agency regarding

HB4248 Engrossed
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LRB104 16598 SPS 29998 b
1
pricing or disclosures, including terms disclosed to
2
consumers.

3

Section 25.
Enforcement by Attorney General.
4

(a) The Attorney General may investigate a claim that a
5
person violated this Act, including the following:
6

(1) require persons to file, on such terms as the
7

Attorney General prescribes, a statement or report in
8

writing under oath or otherwise, as to all information as
9

the Attorney General may consider necessary;
10

(2) examine under oath any person in connection with
11

the conduct of any trade or commerce;
12

(3) examine any merchandise or sample thereof, record,
13

book, document, account, or paper as the Attorney General
14

may consider necessary; and
15

(4) pursuant to an order of a circuit court, impound
16

any record, book, document, account, paper, or sample of
17

merchandise that is produced in accordance with this Act,
18

and retain it in the Attorney General's possession until
19

the completion of all proceedings in connection with which
20

it is produced.
21

(b) The Attorney General may bring an action in the name of
22
the People of this State to restrain or enjoin by preliminary
23
or permanent injunction the person from violating this Act.
24

(c) In addition to bringing an action for injunctive
25
relief under this Section, the Attorney General may seek

HB4248 Engrossed
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LRB104 16598 SPS 29998 b
1
restitution and petition a circuit court for the assessment of
2
a civil penalty as provided by this Section.
3

(d) A person who violates this Act is liable for a civil
4
penalty of not more than $50,000 for each violation.
5

(e) The Attorney General may recover all reasonable costs
6
of bringing an action under this Section, including court
7
costs, reasonable attorney's fees, and investigation costs.

8

Section 30.
Home rule.
The regulation of algorithmic
9
pricing, surveillance pricing, or any other similar pricing
10
mechanism is an exclusive power and function of the State. A
11
home rule unit may not regulate algorithmic pricing,
12
surveillance pricing, or any other similar pricing mechanism.
13
This Section is a denial and limitation of home rule powers and
14
functions under subsection (h) of Section 6 of Article VII of
15
the Illinois Constitution.

16

Section 35.
Relation to other laws.
Nothing in this Act
17
shall be construed to limit any federal or State law.

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