Michigan lawmaker accuses grocery stores of price gouging, ‘surveillance pricing’

Michigan Rep. Rashida Tlaib introduced legislation to ban price gouging in grocery stores and prohibit companies from using “surveillance pricing,” which includes the use of electronic shelf labels and facial recognition technology.

The congresswoman held a press conference with UFCW Local 876 President Dan Pedersen and other community members to announce the Stop Price Gouging in Grocery Stores Act. You can watch the full press conference in the video at the top of this article.

New legislation introduced to ban price gouging in grocery stores

Since 2020, grocery prices have increased by 28% and continue to rise, with 47 million Americans experiencing food insecurity, according to recent data shared by the congresswoman.

“The majority of Americans are stressed about rising grocery prices,” said Tlaib. “While our neighbors struggle, corporate grocery chains are feeding customer data into algorithms to decide who can be charged more. Companies should not be allowed to use electronic labeling or your personal information to charge you a higher price. We need to ban corporate price gouging and surveillance pricing.”

The introduced legislation would:

• prohibit price gouging by retail food stores;
• prohibit surveillance pricing in retail food stores, with narrow exceptions for things like senior or student discounts;
• require food stores to disclose the use of facial recognition technology;
• ban electronic shelf labels in large stores;
• establish enforcement by the Federal Trade Commission to hold corporations accountable.

During the press conference, Tlaib said the legislation, H. R. 4966, has 25 co-sponsors.

Electronic shelf labels

The local leaders accused stores of price gouging through the use of electronic shelf labels.

Instead of the sticker that shows the price of the items in the aisles at grocery stores, these digital labels allow grocery stores to change prices within seconds.

Tlaib said that with this technology, grocery stores can change prices of certain items in seconds.

In an example, the congresswoman said when it’s hot outside, stores will raise the price on water because they know people need to buy it.

Mobile apps, shopping history

She said that grocery stores use online profiles and past shopping history to charge people more for certain items that they know they will buy.

Tlaib also accused Target of charging customers who use its app higher prices when they enter the parking lot or the store, assuming they’ve already committed to the purchase.

“This should and must be illegal,” Tlaib said. Companies should not be able to use our online history, past purchases, or location information to charge us higher prices. We must stop corporate price gouging and surveillance pricing; it is corporate greed at its worst."

Facial recognition technology

Additionally, the use of facial recognition technology was mentioned during the press conference.

Tlaib and Pederson explained that facial recognition can be used to track customers as they enter the store and as they go aisle to aisle.

“The use of facial recognition technology in corporate grocery stores not only raises very serious concerns about privacy, but we already know facial recognition is racist,” said Tlaib. “It has a lot of racial biases in it. Studies after studies show you that. We know that facial recognition technology discriminates against our Black and Brown neighbors, but this is not just discriminatory technology; it’s about corporate greed and the CEOs are getting rich while working people continue to struggle.”

Community advocates also spoke during the press conference, including a Detroit resident who said people who live in food deserts are already having to travel for groceries, and now they’re being faced with high prices and the concerns of surveillance pricing.

Previous letters about price gouging concerns

The introduction of this legislation comes after Tlaib sent a letter to Kroger in October 2024, accusing the company of using technologies like digital price tags and facial recognition software, which could lead to discriminatory pricing.

At the time, Kroger denied the allegations and claimed the digital shelf tags were designed to lower costs for shoppers.

Tlaib’s letter followed a letter that U.S. Sens. Elizabeth Warren (D-Mass.) and Bob Casey (D-Pa.) sent to Kroger about how the use of these digital price tags appears “to enable large grocery stores to squeeze consumers to increase profits.”

Local 4 has reached out to Kroger, Walmart and Target for comment about the alleged use of these technologies.