New York’s algorithmic pricing law took effect Monday, requiring companies disclose when they use consumers’ personal data to set prices.

Algorithmic pricing allows firms to automatically change prices based on data like consumers’ income, previous shopping behaviors and location. 

California’s legislature also has enacted an algorithmic pricing law, but it has not yet taken effect, making New York the first state in the country to regulate the practice.

New York Attorney General Letitia James on Wednesday issued a consumer alert, telling residents to report instances where companies use algorithmic pricing without disclosure.

“New Yorkers deserve to know whether their personal information is being used to set the prices they pay, and if businesses are charging customers different prices for the same products,” James said in a prepared statement. 

“I will not hesitate to take action against those who try to mislead New Yorkers and use their personal information to manipulate prices without their knowledge.”

Privacy advocates have long warned that algorithmic pricing — also known as surveillance pricing — can lead to discrimination and unfairness. 

In January, the Federal Trade Commission (FTC) issued a report examining how businesses are using algorithmic pricing.