Dear CRA Members,

I wanted to share an update following this week’s hearing on AB 2564 (Ward) in the Assembly Privacy & Consumer Protection Committee and what it means for retailers and California consumers.

The Bottom Line:

While AB 2564 is framed as a consumer protection and affordability measure, the hearing made clear that, as currently drafted, the bill risks limiting discounts, reducing consumer choice, and increasing costs for everyday Californians.

What the Bill Does:

AB 2564 would prohibit so-called “surveillance pricing,” broadly defined as using personal information (including purchase history, browsing behavior, or location data) to offer customized prices.

While the author emphasized that the bill is not intended to eliminate discounts, the bill’s language is expansive, applying to pricing decisions made “in whole or in part” on personal data and backed by significant penalties - up to $12,500 per violation.

What We Heard in the Assembly Privacy Hearing

Supporters’ Perspective:

• Framed the bill as necessary to prevent unfair or discriminatory pricing
• Raised concerns about lack of transparency in how data may be used
• Positioned the bill as addressing a gap in current privacy law

Concerns Raised by CRA & the Business Community:

• The bill does not distinguish between price increases and discounts
• Many common practices - like coupons, loyalty rewards, and targeted promotions - could be restricted or discouraged
• The compliance structure is complex and ongoing, creating real operational challenges
• The level of legal risk could lead retailers to scale back or eliminate discounts altogether

Importantly, several committee members raised similar concerns and questioned whether the bill, as written, may be broader than intended.

Why This Matters for Consumers

The most effective point raised during the hearing and one that clearly resonated:

This bill doesn’t just target higher prices - it risks eliminating lower ones.

Consumers today rely on:

• Coupons and targeted savings
• Loyalty and rewards programs
• Promotions that help stretch household budgets

Restricting these tools does not improve affordability, it reduces access to savings.

Where Things Go Next

The bill passed out of committee, and will be heard next in the Assembly Judiciary Committee, but the conversation is far from over.

• The author signaled a willingness to continue discussions and consider amendments
• Committee members highlighted the need to address real-world implementation concerns

CRA will continue to engage with the author on the bill.

CRA’s Focus Moving Forward

CRA will continue to advocate for a balanced approach that:

• Protects consumer privacy
• Preserves access to discounts and savings
• Avoids unintended consequences that increase costs

At a time when affordability is a top priority for policymakers, our message is clear:

California consumers need more ways to save - not fewer.

If you have questions or would like to engage on this issue, please don’t hesitate to reach out. We will continue to keep you updated as the bill progresses.

Warm regards,

Rachel

AB 2564 Hearing Recap

CRA Member Briefing

 Assembly Privacy & Consumer Protection Committee

View the committee hearing HERE

Big Picture – Where Things Stand

The hearing on AB 2564 highlighted a fundamental tension:

• Supporters see this as a consumer protection bill
• Opponents see it as a restriction on discounts that will increase costs

And importantly the committee analysis confirms both sides are talking about very different things.

At its core, the bill:

• Bans “surveillance pricing” defined as using personal data to set individualized prices
• Applies broadly to any pricing based “in whole or in part” on personal information
• Includes significant penalties (up to $12,500 per violation)

How the Hearing Played Out

Author Framing: “Prevent Discriminatory Pricing”

• Assemblymember Ward framed the bill as response to:
• AI-driven pricing tools
• The ability to build detailed consumer profiles
• Concerns that companies can estimate “willingness to pay”

The committee analysis (read it HERE) reinforces this framing:

• Surveillance pricing is described as using data like location, browsing history, and demographics to set individualized prices

Supporters emphasized:

• Lack of transparency
• Risk of economic discrimination
• Potential disproportionate impact on lower-income consumers

They also pointed out examples (from the analysis) such as:

• Different hotel prices based on location/IP address
• Price variations on platforms like Instacart

Where the Tension Emerged: What Counts as “Pricing”?

This is where the hearing, and the policy, gets complicated.

• While the author emphasized: “This bill does NOT eliminate discounts”
• The bill analysis confirms:
• The definition of personal information is extremely broad
• Includes purchase history, browsing behavior, location, device data
• The bill applies if pricing is based “in whole or in part” on that data

Opposition Message That Resonated

The most effective argument both in the hearing and reflected in the analysis:

This bill treats price increases and discounts the same and the analysis explicitly acknowledges this concern.

Opponents (CRA) emphasized real-world examples of what would be impacted:

• Grocery coupons based on purchase history
• Loyalty rewards
• “Come back” offers and cart discounts

Opposition (CRA) made the point:

These discounts are not theoretical - they are how consumers save money today

The “Discount Exception”

Supporters repeatedly pointed to exemptions in the bill:

• Loyalty programs
• Publicly disclosed discounts
• Group-based discounts (students, seniors, etc.)

And the analysis confirms those are included.

BUT - this is where committee members leaned in.

Because the analysis also lays out a multi-step compliance structure:

• Any price difference is initially suspect
• Businesses must prove it qualifies for an exception; then meet additional disclosure requirements

That structure drove real concern in the hearing.

Compliance + Liability Risk

The bill analysis confirms:

• $12,500 penalty per violation
• Potential for damages and enforcement actions

This came up in the hearing as a practical issue:

• Even if discounts are technically allowed, the risk + complexity may lead businesses to:
• Scale back promotions
• Standardize pricing
• Eliminate targeted offers altogether

Privacy vs. Affordability

This is the most important takeaway from both the hearing and analysis.

• The author and supporters argue:
• This bill fills a gap in privacy law
• CCPA governs data collection, but not how data is used in pricing

• Opposition (and many committee questions) focused on:
• Whether this solution creates a bigger affordability problem
• The analysis also acknowledges:
• Consumers actively seek out discounts and loyalty programs
• Many are willing to exchange data for value
• These programs can save households significant money annually

Key Takeaways from the Hearing

 “This Treats Discounts the Same as Price Increases”

This line aligned directly with the bill language and landed with members.

Scrutiny of the Exception Structure

Legislators clearly questioned whether the “allowed discounts” are actually workable in practice.

Lack of Clear Evidence vs. Future Risk

Supporters leaned heavily on: Emerging trends and potential harm. While committee members asked: “How widespread is this today?”

Penalty Structure Got Attention

The $12,500 penalty reinforced real-world risk

CRA Takeaway – The Strategic Frame Going Forward

Based on both the hearing and the analysis, the most effective positioning is:

AB 2564 is trying to solve a potential future problem, but risks creating an immediate affordability problem.

More specifically:

• It broadly defines personal data
• It captures everyday discount practices
• It adds compliance + legal risk

And as a result:

It may reduce discounts, limit consumer choice, and increase costs

Bottom Line for Members

• This bill is still evolving
• Legislators are engaged and asking the right questions
• There is still an opportunity to shape amendments