HB 4248

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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,
3represented in the General Assembly:
4    Section 1. Short title. This Act may be cited as the
5Algorithmic Pricing Prohibition Act.
6    Section 5. Legislative findings. The General Assembly
7finds 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	- 2 -	LRB104 16598 SPS 29998 b
1    "Algorithmic pricing" means a price for consumer goods or
2services generated, in whole or in part, using an automated
3decision system, machine-learning model, or data-driven
4algorithm.
5    "Consumer" means a natural person who is an Illinois
6resident acting only in an individual or household context.
7    "Covered entity" means any person or entity that sells or
8offers to sell consumer goods or services to consumers in this
9State.
10    "Personal data" means information linked or reasonably
11linkable to a specific consumer, including, but not limited
12to, browsing history, search queries, geolocation data, prior
13purchases, digital identifiers, or demographic profile data.
14    "Personalized price" means a price for consumer goods or
15services that is set for a consumer based on the consumer's
16personal data.
17    "Surveillance pricing" means algorithmic pricing that uses
18a consumer's personal data to generate a personalized price.
19    Section 15. Surveillance pricing prohibition. A covered
20entity 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
23result of:
24        (1) fluctuations in the cost of acquiring, producing,
		HB4248 Engrossed	- 3 -	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	- 4 -	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	- 5 -	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
6that do not use personal data, including models based on
7aggregate market demand, which includes changes in market
8demand, competitive conditions, and the seller's cost
9structure.
10    (c) This Act does not apply to the use of consumer personal
11data for purposes of determining creditworthiness or
12underwriting a consumer's ability to repay.
13    (d) This Act does not apply to the pricing of any contract
14or policy of insurance that is subject to rules regarding
15pricing to consumers adopted by the Department of Insurance,
16including a surety contract, a dental service plan, a health
17care plan, a limited health care plan, or a voluntary health
18services plan.
19    (e) This Act does not apply to any provider of financial
20services, including a financial institution, a financial
21institution affiliate, a broker-dealer, a registered
22investment advisor, or an entity that provides consumer credit
23products, such as credit cards, personal loans, and mortgages,
24that is subject to rules adopted by the Department of
25Financial and Professional Regulation or rules or regulations
26adopted by any federal financial regulatory agency regarding
		HB4248 Engrossed	- 6 -	LRB104 16598 SPS 29998 b
1pricing or disclosures, including terms disclosed to
2consumers.
3    Section 25. Enforcement by Attorney General.
4    (a) The Attorney General may investigate a claim that a
5person 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
22the People of this State to restrain or enjoin by preliminary
23or permanent injunction the person from violating this Act.
24    (c) In addition to bringing an action for injunctive
25relief under this Section, the Attorney General may seek
		HB4248 Engrossed	- 7 -	LRB104 16598 SPS 29998 b
1restitution and petition a circuit court for the assessment of
2a civil penalty as provided by this Section.
3    (d) A person who violates this Act is liable for a civil
4penalty of not more than $50,000 for each violation.
5    (e) The Attorney General may recover all reasonable costs
6of bringing an action under this Section, including court
7costs, reasonable attorney's fees, and investigation costs.
8    Section 30. Home rule. The regulation of algorithmic
9pricing, surveillance pricing, or any other similar pricing
10mechanism is an exclusive power and function of the State. A
11home rule unit may not regulate algorithmic pricing,
12surveillance pricing, or any other similar pricing mechanism.
13This Section is a denial and limitation of home rule powers and
14functions under subsection (h) of Section 6 of Article VII of
15the Illinois Constitution.
16    Section 35. Relation to other laws. Nothing in this Act
17shall be construed to limit any federal or State law.