By Ilona Lohrey and Marcos Wanless
Special to The Seattle Times
On Aug. 7, the Seattle City Council’s Human Services, Labor, and Economic Development Committee convened to discuss a new policy they call the Fair Pricing and Transparency Ordinance. The chair of the committee claimed the legislation would be a big win for consumers and a local solution to high grocery prices.
Unfortunately, the policy may drive prices even higher for consumers and could end the loyalty and discount programs consumers rely on to balance their family budget and make ends meet.
The legislation would ban “surveillance pricing,” also called algorithmic pricing. It’s a complicated way to say you get discounts based on your personal data — factors such as your income, demographic and shopping history, sometimes with help of AI and sometimes purchased from third-party brokers.
We agree that no retailer should use personal information to charge someone more. But Seattle’s retailers and grocers have told city leaders repeatedly over the past month that they are not using surveillance pricing. Even during the presentation in committee last week, the experts gave no examples of surveillance pricing happening in Seattle.
This legislation was put forward despite clear and consistent warnings from retailers and grocers that requirements in the current version of the legislation would still result in the inability of these businesses to continue offering loyalty programs and other discounts. Mayor Katie Wilson and Councilmember Alexis Mercedes Rinck’s staff have indeed made some changes to the proposal, exempting small grocers and adding carve-outs for some discounts. But flaws remain in the underlying bill.
If passed as is, the ordinance would require grocery retailers and online delivery companies to adopt technical requirements that create high legal risk if they continue to offer discounts and loyalty programs. This will impact those who rely on these programs the most during an affordability crisis — how is that fair?
There are better ways to help consumers through opt-in and opt-out options that allow individuals to choose how and if they want their purchasing data used by supermarkets and retailers.
With a growing number of family budgets stretched by the rising costs for everyday essentials, this policy further escalates the affordability gap for middle- and low-income families.
It’s not just about discounts in stores. Many grocers have fuel savings programs that offer relief to Seattle families paying some of the highest gas prices in the country.
We need legislation that incentivizes new grocers and retailers to invest in areas with growing food and pharmacy deserts, like those in Lake City and parts of South Seattle. Instead, this policy will create more barriers.
In fact, the best way to protect small businesses and consumers is to address pressing problems such as public safety, taxes and regulatory structures.
If the goal of this bill truly is to protect consumers, we are asking city leaders to put a pause on this, do additional research, and work with the grocers and retailers in good faith. A good example of a pricing ordinance is the Consumers Opposed to Surveillance Technology Ordinance, put forward by Portland City Councilmember Eric Zimmerman. (Read it here: st.news/cost)
While it’s unclear whether the legislation moves forward as-is or if the city will make changes, the compliance costs if this policy measure moves forward are guaranteed.
Trying to control prices through an experimental regulatory policy has never worked. The reality is that the implementation of the ordinance will only make an already-expensive city even more unaffordable.
Those costs ultimately mean fewer discounts, higher grocery prices and another reason for grocers and retailers not to invest in Seattle communities that already lack access to grocery stores.
Being the first to implement something should not override having the best policy that is workable and balances all interests.
Ilona Lohrey: is president and CEO of GSBA – Washington state’s LGBTQ+ and Allied Chamber of Commerce.
Marcos Wanless: is the founder and president of the Seattle Latino Metropolitan Chamber of Commerce.
