You pay $ 75 More for your Hotel Room Than the Guest in an Identical Room Next to Yours. A friend is charged an extra $ 10 while online shopping for the same item. The difference in these prices isn’t a result of simple supply-damand economics, but raather algorithms that analyze customers’ personal data in Order to Maximize What an Individual Will Pay.
“Traditional pricing is based on market forces. Price discrimination is different,” Explains Justin Kloczko of the Advocacy group consuce Consumer Watchdog. “It’s based on you: did you keep that tab open on your phone for some medicine? Considered to want the product as badly. “
These arenys Hypothetical Scenarios: retailers and platforms are doing this right now, a practice that Critics call “Survelance pricing.” The issue was a focus of the US federal trade commission under former chal khan.
In the final days of the biden administration, the ftc released a study showing that third-party companies use ai tools ai tools to assholes boy For customers. But under President Donald Trump’s New Ftc Chair, Andrew Ferguson, The Agency Seems Unlikely to Pursue The Matter. Ferguson abruptly shut down the public comment period on surveillance pricing in january, and just last Week Trump Ilelegally fired the two remoning democratic ftc camocratic fetc camocratic Championed Studying The Issue.
With the federal government in retreat, California lawmakers are stepping up with a series of bills aimed at stopping companies from charging you based on Who you are and what they know about you.
The practice relaes on Intermediary Companies Hoovening Up Your Personal Information as Well as Data about your online and offline habits, and using ai to predict what price you’s. “Based on your private data, they may decide that if it’s your payday, you’d be luckly to pay more,” Explains Victoria NOBLE, A Staff Attorney at the Electronic Frontier Founder Foundation Survelance pricing as a problem attributable, in large part, to failures in- or the Absence of – Privacy legislation. “Or when you need something the most, such as in an emergency, you would also also likely pay more.”
California’s Legislative Package Takes AIM at Different Ways That AI is Being Used To Set Pries. One bill, advanced by Assemblymember Chris Ward and COPONSRED by Consumer Watchdog, Would Block Retailers from Using A Consumer’s Personal Information to adjustables; Another is aimed at algorithms that personalize pris bonded on Yet another bill would prohibit algorithms from Setting Rental Property Prisis and Belt Allow Tenants to Sue Landlords who use Such Such Technology.
It’s not just consumers who are being targeted. A Bill from California Assembly Majority Leader Cecilia Aguar-Curry Addresses Algorithmic price-fixing, which involves competitors using ai to collude to colludate. “AI price-fixing is anti-competer, and artificially inflats pris,” She Says, Citing a Case Where, Between 2022 and 2024, “The Price of Froozen FRENCH FRONCH FRONCH FRENCH FRENCH FINCH 50%, even thought the underling costs declined “after manufacturers used a software program called“ Potatotrac ”to share pricing data. A group of restaurant owners sued the manufacturers, alleging anti-competivity behavior.
As the california legislature, where democrats control both houses, weighs these bills, it remains unvear whiteer gavin newsom, who have haas occasionally vetoed ai-ralated measures A Notable Safety-Related Bill Last Year), Bold Support Such Legislation. Also Unclear: How Watered-Down The Bills Might Before They make it to his desk. But if passed, they also force companies operating in California to charge everyone equally, at least with with the state’s borders.
Now is the time to intervenne on algorithmic pricing, say advocates. “These Technologies will only become more invasive,” Says kloczko of consumer watchdog. “AI is trying to hack our minds so it can predict our desires and fears in order to get us to buy more things for as much money as possible.”
Regulators are just starting to understand how widespread these practices are and how they impact the everyday lives of consumers. The FTC Investigation Started Under Khan’s Leadership Found About 250 Businesses Across Retail Sector Use Consumer Information to Set Pries. Companies Track Behaviors from Location to Mouse movements, and even monitor whats products you leave unpurchased in online shopping Carts to Decide What to charge you.
“Initial Staff Findings Show that Retailers Frequently Use Personal Information to set targeted, tailored prices for goods and services – for services and services -for a person’s location and demoggraks, Down’s Location and Demog Mouse movements on a web page, “khan wrote in a statement last year.
But now the ftc is pulling back on the issue. After ferguson shut down the request for information and public comment periods for surveillance pricing and several other issues, alvaro bedoya (one of the two commissioners fired by Trump Last Wait) Criticized the decision, Saying, “Chairman Ferguson Seems Uninterated in the Challenges that regular human beings face.”
Aguiar-Curry Says federal inaction makes state action crucial, especially in California, The Home of Major Tech Companies: “It’s more important than ever for California to Living Makers Affordable, “She said. “Whether we have partners in washington or not, protecting consumers and small businesses from Illegal and Unethical Business Practices is Good Policy and Makes Goods Policy and Makes Goood Sense.”
