As concerns about personalised online prices grow, regulators in the US are moving to restrict transparency and transparency laws emerge, exposing the growing influence of algorithm-driven price discrimination.
Consumers have limited ways to avoid so-called surveillance pricing, in which companies use data gathered from phones and other digital activity to infer how much a person may be willing to pay. Tom McBrien, counsel at the Electronic Privacy Information Centre, told NewsNation that shoppers cannot fully control the information trails they leave behind, especially when buying online. He said that makes it difficult to know when a price has been tailored to an individual rather than set for everyone.
The practice typically relies on algorithmic systems that analyse personal data such as location, browsing habits or device details to shape an offer. Legal guidance from Cornell Law School says surveillance pricing is a form of algorithmic pricing that uses personal information to set different prices for different consumers, while advances in artificial intelligence have made the practice more common. The Federal Trade Commission has also been examining the issue, issuing orders to eight companies in 2024 as part of a study into how these products use consumer data and what that means for privacy, competition and consumer protection.
McBrien said consumers can still take modest precautions. He suggested price-history browser extensions such as CamelCamelCamel, along with incognito browsing and virtual private networks when comparison-shopping. He also warned that loyalty schemes can collect data that may later be used to influence pricing, which is why consumers should be cautious about how much information they trade for discounts and rewards.
Regulators are moving more aggressively as concern grows. Cornell notes that New York has already adopted a disclosure law requiring businesses to tell customers when an algorithm using personal data sets the price. The Electronic Privacy Information Centre says it backs such restrictions, and California Attorney General Rob Bonta has separately launched an investigation into businesses using personal information for targeted pricing, warning that the practice may run against state privacy rules.
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