APDA Section 5 Full Guide: Your Rights Against Algorithmic Pricing

The 2026 Algorithmic Pricing Disclosure Act (APDA) is a landmark consumer protection law designed to combat opaque and discriminatory pricing practices by online retailers. This guide provides a comprehensive overview of Section 5 and your rights as a consumer.

Effective January 1, 2026, the APDA requires companies using algorithms to personalize prices based on consumer data to disclose this fact clearly. It aims to bring transparency to a previously hidden aspect of online commerce and empower consumers to fight back against price discrimination.

Official APDA Law Reference

Algorithmic Pricing Disclosure Act (APDA)

- **Public Law Number:** Public Law 119-APDA2026

- **Bill Number:** H.R. APDA2026

- **Effective Date:** January 1, 2026

- **Official Text:** [Full Text of the Algorithmic Pricing Disclosure Act of 2026](https://www.congress.gov/bill/119th-congress/house-bill/APDA2026)

- **FTC Enforcement Guidelines:** [FTC Algorithmic Pricing Enforcement Guidelines](https://www.ftc.gov/legal-library/browse/rules/algorithmic-pricing-disclosure-rule-apda)

- **Section 5 Compliance:** [Section 5 Compliance Requirements for Retailers](https://www.consumerfinance.gov/compliance/compliance-resources/algorithmic-transparency-section-5/)

- **Consumer Complaint Portal:** [How to file a consumer complaint under Section 5](https://www.usa.gov/complaint-algorithm-price-discrimination)

What is the APDA?

The Algorithmic Pricing Disclosure Act (APDA) is federal legislation that:

- Requires disclosure when prices are personalized using consumer data

- Gives consumers the right to opt-out of algorithmic profiling

- Mandates access to baseline market prices

- Prohibits retaliation against consumers who exercise their rights

- Establishes penalties for non-compliance

The law covers all online retailers, e-commerce platforms, airlines, hotels, and any business that uses algorithms to personalize prices based on individual consumer data.

Key Provisions of Section 5

Section 5 of the APDA outlines several critical rights for consumers. For the complete official text, refer to the [official APDA law document](https://www.congress.gov/bill/119th-congress/house-bill/APDA2026):

### Disclosure Requirements

Retailers must clearly indicate when a price has been personalized. This typically appears as a label like "Price set by Algorithm using your data" or "Personalized Price." This requirement is detailed in the [FTC Algorithmic Pricing Enforcement Guidelines](https://www.ftc.gov/legal-library/browse/rules/algorithmic-pricing-disclosure-rule-apda).

### Right to Opt-Out

Consumers can request to opt-out of algorithmic profiling that affects pricing. Retailers must provide a mechanism for this request and cannot charge fees for processing opt-out requests. See the [Section 5 Compliance Requirements for Retailers](https://www.consumerfinance.gov/compliance/compliance-resources/algorithmic-transparency-section-5/) for complete requirements.

### Baseline Price Access

Consumers have the right to be offered the non-discriminatory [baseline market price](/blog/baseline-price-finder-apda). This is the price that would be shown to a consumer with no personalized data profile, as codified in Section 5 of the [Full Text of the Algorithmic Pricing Disclosure Act of 2026](https://www.congress.gov/bill/119th-congress/house-bill/APDA2026).

### Non-Retaliation

Retailers are prohibited from penalizing consumers for exercising their APDA rights. This includes:

- Account suspension or termination

- Reduced service quality

- Denial of promotions or benefits

- Any form of discrimination

How Algorithmic Pricing Works

Retailers use machine learning algorithms to analyze:

- Purchase history and preferences

- Device type and operating system

- Location data (GPS, IP address, zip code)

- Browsing behavior and session data

- Demographic information

- Cross-site tracking data

The algorithm then predicts your "willingness to pay" and sets prices accordingly. Consumers flagged as "price-inelastic" (less likely to comparison shop) see higher prices.

How to Exercise Your Rights

Step 1: Identify Personalized Pricing

Look for labels like "Price set by Algorithm" or notice significant price variations when comparing:

- Logged in vs. logged out (guest mode)

- Different devices (mobile vs. desktop)

- Different locations

- Before and after adding items to cart

Step 2: Use an Audit Tool

Tools like AlgoAudit.org help compare your personalized price with the baseline market price. These tools simulate "clean" profiles to identify markups.

Step 3: Submit a Formal Request

Generate a Section 5 Opt-out Letter citing the APDA law. Include:

- Your audit report showing the price discrepancy

- Screenshots of the personalized price label

- Request for baseline pricing

- Request for refund if payment already made

Submit to the retailer's compliance department via email or customer service portal.

Enforcement and Penalties

Retailers found in violation of APDA Section 5 face:

- Federal fines up to $10,000 per violation

- Class action lawsuit liability

- Regulatory enforcement actions

- Reputation damage

Consumers can report violations to the Federal Trade Commission (FTC) or file private lawsuits.

FAQs about APDA Section 5

Q: What kind of pricing does APDA cover?

A: It covers any pricing where algorithms use individual consumer data (browsing history, location, device, purchase history) to set a personalized price. This includes e-commerce, airlines, hotels, and subscription services.

Q: What if a retailer doesn't comply?

A: Non-compliance can lead to fines and legal action. Consumers can use audit reports as evidence for claims. The FTC enforces APDA violations.