Economic background: profit maximizing businesses would like to extract the most value out of every transaction. Not everyone derives the same value from the same thing. E.g., someone might be willing to pay $5 for a burger, whereas others might only pay $4. Price too high and you lose the people that will only pay (or can only afford) less. Price too low and you don't charge people as much as they would have been willing to pay and lose out on profit. The economic POV is that voluntary transactions happen because both sides benefit (or at least don't lose out) or they wouldn't happen. Therefore every voluntary transaction produces some economic benefit in the form of producer and consumer surplus. The amount of these is determined by the gap between the price and the consumer's WTP (willingness to pay, i.e., the highest price they would be willing to pay) and the price and the producer's WTA (willingness to accept, i.e., the lowest price they would accept at). Together these form the economic surplus of a transaction.

Profit maximizing businesses want to capture as much of the economic surplus of transactions as possible by optimizing the price they charge. When businesses offer a single price their ability to do so is limited because some people with a lower WTP that is still above the producers WTA don't elect to purchase and on the flip side some people who have a higher WTP would be willing to pay more and don't.

To increase their profits therefore businesses can attempt to do what's referred to as "price discrimination" which is when they offer different prices to people based on the person's perceived WTP (there are different means of doing so, such as geographically based pricing, etc.,) and when they offer exactly the customer's WTP to every unique customer it's called perfect price discrimination, because they're capturing the entire value of all transactions.

In competitive markets, businesses ability to price discriminate is reduced, but not entirely eliminated.

Now... this surveillance pricing is basically a form of price discrimination. However, the interesting part is that while price discrimination in net is beneficial for businesses, it actually can also benefit lower income/lower WTP consumers by allowing them to buy at a lower price (since they wouldn't have bought at a higher price -- both the consumer and the business benefit here) but hurts customers with a higher income/WTP since the business can charge them more.

This is interesting because this is a somewhat rare regressive (hurts lower income people more than higher income people) anti-business policy. Generally, I think most anti-business policies are also progressive (well, except for the idiotic ones like broad tariffs) but in this case banning the ability of price discrimination through personalized pricing hurts businesses and lower income people while benefiting higher income people (the surveillance aspect of it could be thought of as an externality, which hurts everyone).

If you're highly anti-surveillance you might argue that it's net positive for everyone because lower income people wouldn't be surveilled in the same way (well, at least it wouldn't be applied, I don't think it would actually change the surveillance side of things) but that requires a normative position on whether surveillance is bad.

In theory this policy could probably be made non-redistributive (benefitting higher and lower income people equally) by adding a grocery tax that would be used to offset the impact to lower income people, but in practice it seems like it would be difficult to administer (especially in Seattle, which doesn't collect city taxes from people directly today, not to mention the opportunities for arbitrage).

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This is great news, but a bit surprising. I think, truth be told, the socialist left would like nothing better than to have surveillance pricing, so long as it is deployed in the aid of poor people. And of course the designation "surveillance pricing" would have to go. Something like "equity pricing" would have a much better ring to it.