S.B. 177 Product Pricing Amendments: transcript

Senate Business and Labor Committee, Feb 6, 2026

1. Committee chair (Sen. Evan J. Vickers)1:31:26

   Senate Bill 1 77 Product pricing Amendments. Senator Pitcher.

2. Sen. Stephanie Pitcher1:31:47

   Thank you, Mr. Chair. I have a couple handouts. Am I okay to Pass those out? Yeah, let's, let's bring it up and we can get our staff to pass those out. Great. Oh, yeah. Okay. I'm ready whenever you are. Oh, I'm sorry. Go ahead.

3. Sen. Stephanie Pitcher1:32:22

   Okay. Thank you. Um, thank you Mr. Chair. Uh, so SB 1 77 addresses a practice known as personalized pricing or surveillance pricing. This is a practice that some retailers use, um, to set prices based on information that they know about you. And there's a difference between surveillance, pricing, and dynamic pricing. And I think we'll probably hear more about that in in committee comments today. But dynamic pricing is pricing based on supply and demand. So a good example would be, uh, like if you're calling an Uber and there's not a lot of drivers out right now, your prices are going to go up. Surveillance pricing on the other hand is the price you pay, which is influenced by data. Retailers know about you personally. They use the power of AI to sift all sorts of personal data to set these individualized prices online. So this can be things like your location, demographic information, your age, gender income, your shopping history, your browsing history. Uh, there was one study that showed that they, uh, are tracking online behaviors such as your mouse movements on a webpage and how long you hover over something or products left unpurchased in a shopping cart. All of this data can be tracked and used by retailers to tailor consumer pricing. Um, and there's a video, well, maybe I, I'll opt On. Is that why when I scroll online every other page, I get a golfing equipment ad on there That has to do with that? Yeah. Well, more to deal with the price you see for that Golf. Oh, okay. Yeah. Um, there was a, a study done by Consumer Reports, and that's in one of the articles that I've passed out for you on Instacart AI pricing Practices. That Study showed, well, what that study did is it had a number of individuals select the exact same prices online and purchase it at the exact same time. And it showed that there was some considerable variability in, in the prices that those individuals were shown. In some instances, some people saw as much as 23% higher prices for, uh, some products than other consumers. Uh, this led to basket totals differing by about seven to 8% on average in this study. That experiment also found that in this case, Instacart sometimes showed different original prices for, for the discounted items, giving the illusion of a larger or smaller discount depending on the customer. Um, I think this practice is concerning, concerning because it reshapes markets in ways that I think most people would consider unfair. It erodes consumer, uh, fairness instead of one transparent price companies personal data to charge different people different amounts for the same product that leads to consumers losing the ability to comparison shop because prices are individualized and often hidden, it punishes vulnerability. So individuals who appear more desperate, time constrained or less tech savvy, or with fewer alternatives may be charged more and operates largely in a black box without consumer knowledge or consent. Most consumers don't know that this pricing is happening, cannot realistically opt out and do not understand what data is being used against them. Um, and so what SB 1 77 does is it just requires transparency. Can I, let me just interrupt and clarify too. I, we just realized that there was a sub that popped up. Yes. And I am presenting to the second sub or the first sub, excuse Me. First sub. Okay. Thank you. Yeah, Thank you. I will wanna move that at some point. Um, but s sp 1 77 simply requires transparency. I know there's sentiment including from a couple in this body who are looking at a bill to prohibit the practice. Um, I, I might support that as well, but I think as a, as a, just as a basic measure, Utahans ought to know that this, that this, uh, approach is, is happening. They ought to have, there ought to be transparency in, in these pricing models. And so it just requires for retailers that use the practice that they inform consumers someplace on their webpage. Um, I think Utah Utahns deserve to know how their private data is being used to set prices they pay and whether firms are charging different people different prices for the same goods or service. And with that, I'm happy to answer any questions.

4. Committee chair (Sen. Evan J. Vickers)1:36:33

   Okay. Questions for Senator Pitcher? Seeing none, you wanna make a motion to substitute?

5. Sen. Stephanie Pitcher1:36:40

   Yes. I'll move that we adopt the first substitute.

6. Committee chair (Sen. Evan J. Vickers)1:36:42

   Okay. Motion before is DeLeT and Title and Body Senate Bill 1 77. Replace it with first substitute Senate Bill 1 77. Discussion of the motion. Seeing none. All in favor say aye. Aye. Any opposed? Say nay. I'll rule it passes unanimous. Six to zero. Okay.

7. Committee chair (Sen. Evan J. Vickers)1:37:05

   To, um, any further questions about the substitute of Bill? Seeing none, who in the audience would like to testify on this bill? We have one. We have one online.

8. Dave Davis, Utah Retail Merchants Association1:37:26

   Thank you. Uh, Mr. Chair. Dave Davis, president of the Utah Retail Merchants Association. Uh, appreciate the sponsor in the sense that we have talked a number of times, uh, about this. Uh, we do have some concerns about this. The sub is a little bit better in that it takes into account loyalty programs and things like that that might generate discounts. But, um, I just want to point out, I mean, Senator Vickers raised the point of, is this why I get golf ads? And the answer is yes. Um, typically a retailer wants to provide for you a individualized experience of items that are specific to, uh, you and your, uh, interests. You may be Senator Vickers, a tailor made guy, and Ping may want to convert you to a ping guy and they may want to send you a, uh, a discount. Um, this is something that has happened in the retail community for, uh, a long time. We all remember when we got our grocery circulars in the mail, and those were of course, less targeted, but they might cover a certain area that might be close around that, uh, that grocery store and it might offer ads or discounts. The retailers are using this to offer promotions and discounts to consumers that are individualized for what they, uh, may want. Um, so, uh, I think that there is still, uh, quite a bit of work to be done on this. The first time that we became aware of this bill is when it numbered. And so, um, I think back to a couple of years ago when we did a sort of comprehensive data privacy bill, Senator Cullimore, who seems to have left the building, um, he ran that bill and there was a lot of discussion that happened leading up to the session. There was a lot of input that happened. Uh, and, uh, for example, even with the language that we have now, if that discount that the consumer was offered was not part of a promotional program or a, uh, loyalty program, then there would have to be this disclosure that, uh, that happens along the way. So we would ask the committee, and I've talked to the sponsor about this as well, um, we would ask the committee to hold the bill, um, to, uh, we would prefer to have a more in-depth discussion about this that involves all of the right people. We would love to know where the, um, for instance, the Commerce AI team is on this. We'd love to know how pervasive, uh, the practice of actually raising prices in, uh, is. Um, and because we don't think that the raising of prices is really happening out there, it's typically, again, discounts that are, uh, happening. The other thing is we wanna make sure that we get this language right. I'm not aware of, and maybe the senator is, but, uh, I'm not aware of, uh, of another red state that has done this. And so we wanna make sure that we get the language right because I think that there are, um, folks that are thinking, look, if Utah does this, other states are gonna gravitate to what we do. So we wanna make sure that we get that language right. I think we need to define what a promotional program is, what an individual price increase may be, um, uh, and I can get you to wrap up and what a baseline price may be. So that would be our ask to the committee, hold the bill and let us, uh, work on this hopefully in an interim period. I think I've got a couple of questions for you.

9. Committee chair (Sen. Evan J. Vickers)1:41:47

   Uh, Senator Musselman is your question for Mr. Davis?

10. Sen. Calvin R. Musselman1:41:50

    Yep. Um, let's see. I forgot what it was. Hold on. Let me, I I've got it. Um, so this is in essence, uh, a just a, a warning or a, a disclosure, right? That, that that's, so if it's just a disclosure that would prohibit you, did you suggest that would prohibit from giving discounts or ads or help me out how that would actually work in practice? Right. Um, so this would be unique to Utah, right? I don Don't know. I'm just trying to figure out if how that

11. Dave Davis, Utah Retail Merchants Association1:42:30

    Works. Yes, it would be, it would be unique to Utah. It is sort of a unique approach because in other states like New York where something like this passed, it was a prohibition.

12. Sen. Calvin R. Musselman1:42:42

    Right? Uh, Okay. But that, I just want, I just want to know how that would work in practice, not what New York did or prohibition. What, how would that inhibit an individual? I I understand how it, uh, how would it inhibit the, the practice of using the algorithm for advertising and offering discounts by having that, uh, disclosure on there? That's what I'm trying to figure out.

13. Dave Davis, Utah Retail Merchants Association1:43:09

    Yeah. So as far as providing the disclosure, I'm not sure if retailers would provide the disclosure or if they would just stop promoting.

14. Sen. Calvin R. Musselman1:43:19

    Okay. So they would just in lieu of, because the disclosure somehow might hurt the promotion. Okay. All right. I understand that. Thank you. Thank

15. Committee chair (Sen. Evan J. Vickers)1:43:28

    You. Senator McKay.

16. Sen. Daniel McCay1:43:31

    So, do you have a problem with the po with the policy of the bill though, where she, it seems like she's trying to prevent price gouging, uh, you know, based on affluence or, you know, whatever, uh, you know, or demand, you know, uh, the idea of, I don't know, you're in need of something and as a result we're gonna raise the price on it, you know, what are your thoughts on that?

17. Dave Davis, Utah Retail Merchants Association1:43:56

    So, no, we don't have a problem with that general policy approach, which is because all of the feedback that I'm getting from my retailers is that's not what we do. Mm-hmm. We don't raise the price. We're typically using data to individualize promotions to make sure people are getting ads that are relevant to them and offering discounts to, uh, to people.

18. Dave Davis, Utah Retail Merchants Association1:44:24

    So Senator Pitcher mentioned one transparent price, but the fact of the matter is, if I offer a discount to you because I want to convert you from a tailor made guy to a ping guy, does that mean everyone else has to pay a higher price? So

19. Sen. Daniel McCay1:44:47

    Yeah, that's the, I'm trying to find, it doesn't sound like your group is in favor of the higher tiered pricing and trying to find that balance to make sure we don't outlaw discounts.

20. Dave Davis, Utah Retail Merchants Association1:44:59

    And I don't think that the, the consumers of Utah want us to outlaw discounts. And especially in a session where there's been a lot of overtones about affordability to prevent promotion and discounting, uh, is not something that I think that the general public wants to see.

21. Sen. Daniel McCay1:45:21

    Again, I just, how Cer how certain are you that they don't want discounts or they don't want us to ban discounts?

22. Dave Davis, Utah Retail Merchants Association1:45:26

    I, here, I can tell you, having spent many, many years representing retailers, consumers love discounts. Mm-hmm. So, and so I just think, let's get this right rather than fast. I turned to Senator Cullimore and how he did his data privacy bill back three years ago. And there was just a lot of, uh, discussion, a lot of collaboration, making sure that we get the, the, um, the policy and the language, right. For example, we don't wanna retailer to be able to mark something up first and then discount it and say, Hey, we're offering you a discount, even though the net price is higher than what it would've been. So we need to take care of all of those things and make sure that we get this right.

23. Sen. Daniel McCay1:46:18

    So she could, the sponsor could just change the bill and say, nothing about this bill is intended to limit discounting or anything off of, you know, MSRP or those kinds of things. And you guys would be okay with it, it sounds like. 'cause the rest of it wouldn't apply. Yeah.

24. Dave Davis, Utah Retail Merchants Association1:46:36

    As long as the language was right. I think that getting that language right, and especially, uh, you know, this during the session, I mean, maybe we could, there's Plenty of time. Mm-hmm. We're, well look, we're, we're at, we're three weeks through, but we got years still to go before March 6th. So anyways, thank you.

25. Committee chair (Sen. Evan J. Vickers)1:46:59

    Okay. Thank you. Uh, we have one person online that'd like to testify. Um, drew Ambrogi. Drew, if you can turn your camera on, give us your name and who you represent and where you live.

26. Drew Ambrogi, Chamber of Progress1:47:15

    Thank you. Chair Vickers, members of the committee. Um, my name's Drew Ambrogi. I'm with Chamber of Progress. I live in Washington, DC Um, chamber of Progress is a tech industry association. We support public policies to build a society in which all people benefit from technological advances. Our partners do include e-commerce platforms and other tech companies, but they don't have a vote or veto over our positions. Um, though we appreciate SB one seven seven's intent to protect consumers, um, here to respectfully urge you to oppose the bill, I think the, the bill begins with the assumption that any use of external data to set prices as predatory. But I think as Mr. Davis has pointed out, um, it also is used to, to lower prices. Despite a lot of speculation, there's still very little evidence that companies are systemically using personal data to charge higher prices to individuals specifically. Uh, even the cited consumer report study on Instacart, um, actually found that those prices were not tied to personal information at all, but was in fact random AB testing. Something that is entirely separate from what the built seeks a target. Uh, consumers primarily encounter algorithmic pricing in the form of personalized discounts, targeted deals, practices that help businesses move products and earn repeat customers fostering competition and delivering value. I think, uh, we do appreciate the exceptions included in the substitute, but the bill still contains significant ambiguity in its definitions that could require alarming all caps, warnings on routine transactions, something like using a.edu email address to get a student discount, uh, or offering someone a deal on a new product because they've purchased something similar in the past. Um, I think this warning is not only not likely to be very effective because consumers routinely skip these things, but it sends kind of an alarming message that these routine, very common pro-consumer practices are, are something to fear and something to be concerned about. Um, we really think that at a time when families are struggling with a rising cost of living, adding a stigmatizing warning to kind of mundane discounting practices, um, that help them stretch their budget sends kind of the wrong message. Uh, so we'd respectfully are due to oppose the bill, and I'm happy to answer any questions.

27. Committee chair (Sen. Evan J. Vickers)1:49:38

    Thank you. Okay. We'll come back to the committee for further deliberation or action.

28. Sen. Calvin R. Musselman1:49:43

    Senator Musselman? Yeah, I, I meant to ask this question earlier. I just missed getting it, but I had asked you earlier, and I just want to get a sense of, of maybe if you thought about it more, but, um, we have the AI lab now under the, I think it's under the Department of Commerce. Um, and that's the whole point of that lab, as I understand it, as it pertains to AI and technology, is to, you know, submit this to 'em, let them provide, you know, research on it. They have, they're all set up to take a look at this, take everybody's, you know, kind of input that are in this world and be able to give potential policy, you know, um, advice going forward. And can you just talk to that and I'll, um, that'll be it for me. So,

29. Sen. Stephanie Pitcher1:50:27

    Yeah, I, I'm not necessarily opposed, I know there's been an effort or a, a suggestion that this should be moved to, to interim. Um, and I think if that is the will of this committee, I won't be heartbroken over it. Um, but I don't think it's the best step. I think that we are capable of, uh, vetting this policy, um, getting additional folks to take a look at it before, uh, uh, advances even to the Senate floor. I expect it'll take at least two weeks at the rate we're going to, to have this come up again. And I, I think the, the downside of, of sending it to interim or sending it to, to that subcommittee, Senator Vickers, that, uh, Utah consumers will then be subject to this practice for probably another year. And this is a practice that is developing quickly and is becoming more sophisticated. And so, um, it does, as we've discussed, it does not ban the practice. It just gives transparency. And I think that's something that Utahns deserve. And so my, my request is that we, we do do something today. We move it forward.

30. Committee chair (Sen. Evan J. Vickers)1:51:24

    Thank you. Um, Senator Musselman? Is that, that's it. Okay. Thank you. Further deliberation or action?

31. Sen. Stephanie Pitcher1:51:36

    I would make a motion that we pass this out with a favorable recommendation, and I'd like to speak to that.

32. Committee chair (Sen. Evan J. Vickers)1:51:41

    Okay. Motion before us is to favorably recommend first substitute Senate Bill 1 77 discussion to that motion. Seeing none. Back to you, Senator Pitcher.

33. Sen. Stephanie Pitcher1:51:53

    Thank you, Mr. Chair. I do wanna address a couple things that were raised in public, uh, comment. Um, there was a comment made that we're, we're not aware of another red state that does this. I'll share with the committee that I'm aware of two of my Republican colleagues that have a bill open to ban the practice. Um, additionally, uh, at least five states that I know of Kentucky, Oklahoma, Texas, Tennessee, and Florida, as of six hours ago, have opened a, have introduced a bill to either require transparency or to ban the practice altogether. So I think this is really an issue. It's not a partisan issue. This is just an issue that we all care about, and we all want transparency, um, in this, in this process. Um, this is not quite why you get golf ads, so that's a different thing that happens. I think personalized ads are a good thing. I get chess ads, um, and I'm okay with that. I have chess clocks on my, on my algorithm, and I'm okay with that. Um, but what I think should be concerning is if you are, if your phone is about to die and you're requesting a ride, all of a sudden your price goes up. Or if you're online searching for, um, fever medicine for your child, and now you're looking for a thermometer and the price all of a sudden goes up, that's concerning. We're not asking to ban, I'm not asking, suggesting that we ban the practice, but I am suggesting that we be transparent, transparent about it so that consumers can, one, know that it exists. And two, take whatever small steps they can in order to try to avoid it. Um, I appreciate the comments about discounts, and I agree this shouldn't ban practices or loyalty programs that lower prices for companies, but I guarantee you that none of these companies that are engaging in with data brokers are doing so to lower their prices. They're doing so to find more strategic pricing practices that generate a profit. Um, there was a comment made that we don't think that raising prices happens here. Um, based on the research that I've engaged in, I know that Target, home Depot, Costco, and of course Instacart as was mentioned earlier, have engaged in this practice in some way, whether we know what's happening or not. It's a practice that is developing very quickly, and I think that it's, it's prudent for Utah to do, to take some steps, some small steps to try to get on top of it. Um, so I'm asking for the committee support in advancing this forward with the recognition that it is going to require some work, and I'm committed to doing that between now and when it hits the Senate floor.

34. Committee chair (Sen. Evan J. Vickers)1:54:14

    Okay. Thank you. We'll do a rule call vote it's turn over to staff Zoe. Senator Colmore? No. Senator Ipson? No. Senator McKay. Senator Musselman? No. Senator Pitcher?

35. Sen. Todd Weiler1:54:36

    Aye. Senator Sandall? No. Senator Weiler. I am too.

36. Committee chair (Sen. Evan J. Vickers)1:54:41

    Chair Vickers?

37. Sen. Evan J. Vickers1:54:45

    Um, no.

38. Committee chair (Sen. Evan J. Vickers)1:54:47

    So roulette passes and fails two to six with Senator Weiler and Senator Pitcher voting in favor. Thank you. Thank you. Uh, we'll go to, uh, the next item agenda. You're right there. So we'll go with Senate Bill 180 2.