Opinion: House Bill 2481 will stifle innovation and hurt businesses

Mark Harmsworth says policymakers should reject this bill and embrace policies that empower businesses to respond to market signals, ensuring abundance and affordability for all Washingtonians

Mark Harmsworth
Washington Policy Center

House Bill 2481 (HB 2481), introduced by Representative Mary Fosse (D), represents a misguided attempt to limit the free-market under the guise of consumer protection. Titled “Prohibiting surveillance-based price discrimination and surge pricing for retail goods,” HB 2481 would ban businesses from using data-driven algorithms to adjust prices based on demand, consumer behavior, or real-time market conditions. It mandates uniform pricing and imposes a four-year moratorium on electronic shelf label systems in stores larger than 15,000 square feet. Violations would be treated as unfair practices under the Consumer Protection Act, exposing businesses to lawsuits and penalties.

For businesses that rely on market-demand pricing, such as grocers optimizing inventory during peak times, this legislation would spell disaster. When demand spikes, like during holidays or supply disruptions, allowing prices to rise signals suppliers to increase production and delivery. Banning this flexibility could lead to chronic shortages, as seen in regulated markets where fixed prices discourage restocking. Imagine empty shelves for essentials because suppliers can’t justify the extra effort without compensating margins. Washington’s grocers, already squeezed by thin margins (often 1-2%), would face higher operational costs to maintain steady supplies, ultimately passing those burdens onto consumers through elevated baseline prices.

HB 2481’s broad definitions exacerbate the problem. “Surveillance pricing” is poorly defined and the moratorium on electronic shelves ignores how these tools reduce labor costs for manual updates and enable quick adjustments to wholesale changes. Larger retailers, excluded from small-business exemptions, will shoulder compliance headaches, including audits and legal risks, diverting resources from growth and hiring.

HB 2481 is not price protection. It is government overreach that distorts markets and punishes adaptability. In a state grappling with inflation and supply chain woes, HB 2481 could worsen access to goods, deter investment, and favor out-of-state competitors unbound by these rules.

Policymakers should reject this bill and embrace policies that empower businesses to respond to market signals, ensuring abundance and affordability for all Washingtonians.

Mark Harmsworth is the director of the Small Business Center at the Washington Policy Center.