States continue to lead the way in actions to enforce consumer protection laws against junk fees across a growing range of industries. In a recent Husch Blackwell Government Enforcement Investigation and Compliance webinar, that included its Antitrust & Competition group, the Texas AG’s cases against junk fees charged by major hotel and booking chains were highlighted and broader state and federal junk fee initiatives were summarized. Since then, two significant new state developments have concentrated attention on junk fees.
On May 18, 2026, a coalition of sixteen state attorneys general (AGs) filed a comment letter urging the Federal Trade Commission (FTC) to amend its Trade Regulation on Unfair or Deceptive Fees to cover online food delivery platforms—and to issue a separate new rule targeting personalized or “surveillance” pricing. On June 15, 2026, New Jersey Governor Mikie Sherrill issued Executive Order No. 19 directing all executive branch departments and agencies in New Jersey to evaluate junk fee practices across every industry they regulate, while the New Jersey Division of Consumer Affairs simultaneously released an Enforcement Statement signaling active enforcement of the state’s Consumer Fraud Act against alleged junk fee offenders statewide.
What Are Junk Fees?
Federal Prohibitions Against Junk Fees and Drip Pricing
The FTC issued its Trade Rule on Unfair or Deceptive Fees (16 C.F.R. Part 464) in December 2024 (the Rule), prohibiting bait-and-switch pricing and other fee-concealment tactics in the live-event ticketing and hotel/short-term lodging industries. According to the FTC, the Rule is estimated to save Americans more than $11 billion and over 53 million hours over the next decade in these sectors.
In the latest example of the FTC’s continuing commitment to junk fees enforcement in online services, in early July, the Commission brought a complaint in federal district court in Massachusetts against a travel technology company and its parent company alleging the use of junk fees across its app which offers online booking for airlines, hotels and rental cars. According to the FTC’s complaint, the company advertises itself as the “travel app with no hidden fees” and yet in fact charges hidden fees. The Commission also alleges material misrepresentations by the company during the online booking process and in the promotion of add-on travel products. The six-count complaint alleges violations of Section 5 of the FTC Act and the FTC’s junk fee Rule.
Building on this foundation, the FTC issued an Advanced Notice of Proposed Rulemaking (ANPRM) in April 2026 to consider extending similar protections to online food delivery services. In the ANPRM, the FTC stated its view that food delivery platforms are among the most significant sources of drip pricing concerns in the modern economy.
When the FTC published the ANPRM, it solicited public comments on whether to amend its Unfair or Deceptive Fees Rule to cover online food delivery services. The ANPRM identified several categories of alleged harmful practice that the FTC contends have proliferated in the food delivery sector. First, it claims that the proliferation of fees—delivery fees, service fees, small order fees, and “regulatory response fees” (fees charged in jurisdictions that have enacted minimum pay standards for delivery workers) —are, according to the FTC, frequently not disclosed until checkout and whose calculation methodology is rarely explained. Second, it addressed platform-imposed markups, under which menu item prices on delivery apps are allegedly higher than the prices offered directly by the restaurant or in-store, and the related practice of dynamic pricing, under which prices fluctuate in real time based on demand and other factors. Third, it identified the growing use of personalized pricing—where platforms use individual consumer data, including purchasing history, location, and data acquired from third-party brokers, to set prices that vary from consumer to consumer in ways the consumer cannot readily detect or anticipate. It should be noted that the FTC has been conducting a broader study of the use of surveillance pricing generally in evolving markets.
State AGs File Comment Expressing Support for Expansion of the Junk Fee Rule
On May 18, 2026, a group of sixteen (16) AGs led by New York and Tennessee sent a letter to the FTC supporting the ANPRM and recommending additional rulemaking on the use of surveillance pricing by online food delivery services. The signing AGs were New York, Tennessee, Arizona, Connecticut, Delaware, the District of Columbia, Illinois, Maryland, Minnesota, New Jersey, New Mexico, North Carolina, Oregon, Vermont, Virginia, and Washington.
On the fee and markup issues, the AGs made three recommendations. First, they urged the FTC to extend its existing rule to cover online food delivery services, which could be accomplished by a small addition to the existing rule. Second, they called for enhanced disclosure requirements specific to food delivery: at every stage of the item-selection process, the total order price inclusive of all fees should be clearly and conspicuously displayed; each fee should be accompanied by an accurate description of its purpose and how it is calculated, including whether revenue from the fee goes to the platform, the restaurant, or the delivery worker; and any markup or variation from in-store pricing for individual menu items should be disclosed and separately itemized in the order total. Third, they noted that the FTC’s existing rule may not be well-suited to address personalized pricing by online food delivery services because it falls outside the drip-pricing paradigm the Rule was designed to combat.
On personalized pricing—sometimes called “surveillance pricing”—the AGs took particularly strong positions. They described the practice as companies’ use of consumers’ personal data (purchasing history, location, behavioral data gathered from platform interactions, and data purchased from third-party brokers) to make individualized pricing decisions, including not just varied base prices but also personalized discounts and promotions designed to extract more revenue from consumers identified as able or likely to pay more. The AGs assert that personalized pricing on food delivery platforms raises distinct harms: in their view, platforms acting as intermediaries gain access to far wider consumer data than any individual restaurant does, enabling sophisticated pricing models that could, according to the AGs, favor some restaurants over others, charge higher prices to consumers in food deserts who have limited alternatives, and target consumers known to have more liquidity (such as on payday).
The AGs noted that New York has enacted legislation requiring disclosure of personalized pricing (N.Y. Gen. Bus. Law § 349-a), that Maryland passed legislation restricting certain food retailers and third-party delivery platforms from engaging in personalized pricing based on consumer data, and that over a dozen other states are considering legislation ranging from disclosure mandates to outright prohibitions. They urged the FTC to issue a new, standalone rule requiring online food delivery platforms to disclose: (1) any use of personalized pricing technology; (2) any specific price set through such technology; and (3) any variation from a fixed reference price, such as the in-store or general-public price. They emphasized that any federal rule should function as a floor, preserving the authority of states to adopt stronger protections.
New Jersey’s New Junk Fee Enforcement Initiative
States with and without special junk fee statutes have pursued enforcement actions against the use of junk fees and drip pricing under state consumer protection laws. New Jersey is a leading example—its Consumer Fraud Act (CFA) provides a broad prohibition on deceptive and misleading practices, and the NJ AG and the Division of Consumer Affairs have used it to bring enforcement actions against auto dealers, rental car companies, food delivery apps, financial institutions, mortgage lenders, home improvement contractors, towing companies, utility providers, and others. On March 16, 2026, NJ AG Jennifer Davenport sued one of the nation’s largest subprime installment lenders for allegedly charging New Jersey residents approximately $27 million in alleged junk fees between 2021 and 2022. The NJ Division of Consumer Affairs has asserted that the CFA’s prohibition on unfair and deceptive acts and practices applies to the full range of junk fee conduct, from hidden fees buried in fine print to fees revealed only at checkout to fees that are so excessive as to offer the consumer virtually no corresponding value.
On June 15, 2026, NJ Governor Mikie Sherrill issued Executive Order No. 19 (Order), stating that the elimination of junk fees is a top priority of her administration. The Order directed all NJ Executive Branch departments and agencies to evaluate the conduct of industries they oversee, identify prevalent junk fee practices, assess their impact on consumers (with specific attention to impacts on lower-income and minority consumers), review state contracts with third parties to the extent those contracts permit junk fees, and submit written assessments and recommended rule proposals to the Governor by September 14, 2026. The assessments must include recommendations for “all-in” pricing and transparent fee disclosure standards across state programs and regulated industries. The Governor will review and coordinate responses across agencies and may consider additional legislation, gubernatorial measures, and cabinet-level actions.
Complementing the Order, the NJ Division of Consumer Affairs released an Enforcement Statement on Junk Fees, explaining how the full range of common junk fee practices—from fees buried in fine print to fees disclosed only at checkout to fees that are so excessive as to provide consumers no real value—may violate the New Jersey Consumer Fraud Act. The Division stated its intent to monitor industries actively and bring enforcement actions against businesses that use junk fees to drain household budgets and undermine fair competition, while exploiting increasingly sophisticated technology and AI to make such fees impossible for consumers to avoid.
Takeaways
The ongoing federal and state regulatory and enforcement activity signals that pricing disclosure practices across a wide range of industries are under active scrutiny. The FTC’s existing Trade Rule on Unfair or Deceptive Fees already applies to live-event ticketing and hotel/short-term lodging. The pending ANPRM indicates that the FTC is actively considering whether to expand that framework to food delivery services, though any such expansion would be subject to the federal rulemaking process. The sixteen-state coalition comment to the ANPRM and New Jersey’s comprehensive junk fee initiative reflect growing state-level interest in enforcement and legislation in this area, which appears to be proceeding in parallel with federal activity.
Companies operating in online retail, food delivery, lodging, financial services, transportation, rental housing, and other sectors in which fees accumulate between the advertised price and the final total may wish to review their pricing disclosures for compliance with the FTC Rule, applicable state consumer protection laws, and the growing body of state legislation addressing drip pricing and personalized or surveillance pricing. Businesses that use consumer data to set individualized prices or to target personalized discounts and promotions may face particular regulatory interest and should monitor developments at both the federal and state levels, including the FTC’s anticipated further activity on surveillance pricing.