The provincial NDP government announced last week that it intends to enact legislation to end what it calls “predatory pricing” in grocery and other retail stores in Manitoba.
Consumers can pay different prices for the same product based on their personal profile, which can include what postal code they reside in (i.e., a wealthy or poorer neighbourhood), their unwillingness to switch brands, and other data collected through loyalty or rewards cards and apps.
The practice is called algorithmic pricing or dynamic pricing, and it can lead to hidden price changes and have an impact on food affordability.
The province’s public service delivery minister, Mintu Sandhu (Maples MLA), introduced Bill 49, the Business Practices Amendment Act, to ban retailers from using consumers’ data to increase the price of groceries and other goods.
The proposed legislation also applies to online retailers and online distributors.
“Protecting Manitobans from unfair pricing practices is essential to keeping life affordable,” said Sandhu in a March 17 news release. “These are first of their kind amendments and take aim at the misuse of personal data to inflate prices and ensure consumers are treated fairly whether they shop at the grocery store or other retailers. By strengthening these protections, the Manitoba government is reinforcing its broader commitment to lowering everyday costs for families.”
The bill was given first reading in the legislature on March 12.
Grocers and other retailers can employ algorithmic pricing based on the consumer data they feed into artificial intelligence and other technological systems. But Bill 49 states that an “unfair business practice” may occur when grocers/retailers use machine learning or artificial intelligence systems to analyze and target consumers.
Personalized algorithmic pricing is defined in the bill as “pricing that’s based on the use of an algorithm or automated processing to set, recommend or vary a price offered to a specific consumer as a result of data about the consumer collected, analyzed or processed with or without the consumer’s consent, knowledge or involvement….”
If there was any doubt that consumers are being intensely scrutinized by grocers and other retailers, Bill 49 puts that to rest.
It says the data that grocers/retailers collect include consumers’ personal information, browsing behaviour, purchasing history, spending patterns, the profiles on consumers’ electronic devices that are used to browse or purchase items, their “inferred willingness” to enter into a transaction, socio-economic status that includes their income level, their employment pay period, their financial assistance payment schedule, credit history, location that includes their address, and their medical history or health status.
The data are collected when people sign up for rewards or loyalty cards, use loyalty apps to browse online, and through in-store tracking.
It’s unclear how a grocer/retailer will be identified and prosecuted under the proposed legislation. And the bill has a two-year time limit on prosecutions for an offence.
Bill 49 is part of a suite of measures the NDP is taking to help lower grocery prices for Manitobans. Those measures include a price freeze on milk (1 litre), removing property controls on grocery store locations to encourage grocery competition, permanently eliminating the gas tax, and increasing the provincial property tax credit so that people have more money for groceries.
