New York City Broadens Its Consumer Protection and Antitrust Enforcement Agenda
October has brought an increase in New York City’s (NYC) already aggressive consumer protection and competition agenda. The most recent developments include proposed regulations on artificial intelligence (AI) customer-service systems and legislation authorizing private enforcement of the city’s consumer protection laws. Those initiatives follow adoption of a “click-to-cancel” rule, an AI enforcement policy statement from three NYC agencies, and a proposal to prohibit individualized pricing based on personal data. At the same time, the city has also announced a new focus on criminal antitrust violations.
Much of this work echoes Federal Trade Commission (FTC) initiatives undertaken during the Biden Administration, which may reflect the influence of NYC Department of Consumer and Worker Protection (DCWP) Commissioner Sam Levine – who previously served as Director of the FTC’s Consumer Protection Bureau. The new emphasis on antitrust is also notable, particularly as former FTC Chair Lina Khan now serves as the chair of the board of directors for the New York City Economic Development Corporation.
Below, we outline these initiatives and summarize their key dates and status.
DCWP Proposes Ban on AI Customer-Service “Doom Loops”
On October 20, 2026, the Mamdani Administration announced a new proposal targeting what it termed AI customer-service “doom loops.” DCWP described the initiative as proposed first-in-the-nation municipal protections to ensure consumers can reach a human agent and to provide accountability to ensure companies meet the commitments they advertise regarding customer service. The proposed rule includes three specific prohibitions on deceptive and unconscionable conduct:
- Failing to promptly disclose the consumer is interacting with an automated customer service system rather than a human representative;
- Representing that customer service is available while “repeatedly and unreasonably” directing consumers to menus that do not address their inquiries or responding to their inquiries with “unresponsive, irrelevant, or erroneous information”; and
- Failing to provide consumers engaged in customer service interactions with either “a single-step transfer mechanism” to “interact with a human representative,” or, if a human representative is not available, “instructions for how to obtain assistance from a human representative” by one of six methods described in the rule.
The deadline to file comments on this proposal is December 18, 2026, and DCWP is holding a public hearing the same day.
POWER Act Would Create a Broad Private Right of Action
The proposed People and Organizations Winning Economic Relief, or POWER Act, could significantly increase private consumer-protection litigation in New York City. Announced by Mayor Mamdani on October 6, the legislation would create a broad, municipal private right of action allowing individuals, workers, and small businesses to sue over unfair methods of competition and unfair, deceptive, abusive, or other unlawful practices. The legislation would also authorize nonprofits to bring claims on behalf of themselves, their members, or members of the general public.
Click-to-Cancel Rule Takes Effect
On October 1, 2026, the New York City DCWP began enforcing its new “Click-to-Cancel” rule, which regulates subscription and automatic-renewal offers. Among other requirements, businesses must clearly disclose material subscription terms and provide a straightforward cancellation mechanism through the same medium used to subscribe. The rule also prohibits businesses from obstructing or unreasonably delaying cancellation, which may implicate many companies’ use of special offers – sometimes called “sales saves” – presented to customers to encourage retention. Violations can result in restitution and civil penalties beginning at $525 per violation. The rule was finalized in July, following the Mayor’s January 2026 Executive Order directing DCWP to prioritize enforcement against deceptive subscription practices. City officials describe it as the first municipal rule of its kind in the United States.
Enforcement Policy Statement on AI, Algorithmic Tools, and Automated Systems
Also on October 1, 2026, DCWP and two other NYC agencies issued an enforcement policy statement emphasizing that an “entity cannot avoid responsibility for violations of law because of reliance on an algorithm, AI, or other technology.” The policy statement also emphasized specific ways DCWP enforces NYC’s consumer protection law in connection with marketing related to AI, including “claims about the capabilities, performance, accuracy, outcomes, or uses of AI systems; representations made by chatbots and other agentic systems; and the design, marketing, sale, or deployment of AI-enabled products and services.” DCWP issued the policy statement jointly with NYC’s Commission on Human Rights and Taxi and Limousine Commission.
Manhattan DA Creates Corporate Crime and Antitrust Task Force
The City’s aggressive posture is not limited to civil consumer protection. On October 14, Manhattan District Attorney Alvin Bragg announced a new Corporate Crime and Antitrust Task Force, which will focus on complex investigations involving both corporations and corporate executives. The task force will be led by a “40-year veteran” of the Manhattan DA’s office and staffed by approximately five other attorneys and two investigative analysts, with support from the Office’s investigators, forensic accountants, and Financial Intelligence Unit. The DA’s Office says the initiative is intended not merely to prosecute individual misconduct, but also to investigate the “upstream” corporate structures that “enable and profit from” criminal activity.
Commissioner Levine Continues Advocating for City Council Adoption of a Personalized Pricing Ban
As we have noted previously, the NYC Council is considering legislation that would go further than New York State’s existing pricing disclosure regime by prohibiting what the Council calls “surveillance pricing.” Introduction 891, announced on May 14, 2026, would prohibit most sellers of goods and services from using consumers’ personal data to set individualized prices. The Council’s Committee on Consumer and Worker Protection held a hearing on the proposal on June 17, after which the measure was laid over in committee. Although it remains pending, Commissioner Levine spoke forcefully in support of the proposal at public events in late September. The proposal is more prescriptive than New York State’s Algorithmic Pricing Disclosure Act, which took effect in November 2025 and follows a transparency-based approach requiring disclosure when companies use personal data to set individualized prices.
Conclusion and the Look Ahead
We expect both DCWP and the new task force on criminal antitrust enforcement to be active in the new year. DCWP has already been extremely active, with recent enforcement actions announced in a wide range of industries such as rental cars and self-storage units. The initiative to expand the city’s enforcement tools portends even more activity. At the same time, the scope and practical impact of these initiatives remain very much in flux. Companies doing business in New York City should therefore closely monitor developments as the city’s consumer protection and competition enforcement landscape continues to evolve.
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Wiley’s Consumer Protection, Artificial Intelligence, Antitrust, and State Attorneys General teams routinely advise clients on compliance with local, state, and federal regulations on a range of issues involving AI, consumer pricing, and data privacy. We also routinely help clients respond to government inquiries on these same issues. For more information, please contact the authors of this alert.
