Is artificial intelligence being used to charge customers more? ::WRAL.com

Every day, shoppers provide their details for free when shopping online. A federal investigation is underway to determine whether companies are using surveillance pricing with artificial intelligence to charge customers more.

Surveillance pricing is more granular than price gouging because, with the help of AI, customers can be charged higher prices based on who they are and where they are.

Jessica Spencer, an AI expert at locally based Penguin Connective, which educates people on how to use AI for business, personal tasks and more, said the Federal Trade Commission is investigating the practice.

“It’s definitely ongoing. I think they’re still trying to understand exactly how it’s being used,” Spencer said.

In July, the committee announced it was investigating eight companies, including Mastercard, JP Morgan Chase, Task Software and Revionics.

Some companies partner with companies such as McDonald’s, Starbucks, Home Depot and Tractor Supply to process customer transactions.

Stephanie Nguyen, chief technologist at the Federal Trade Commission, said surveillance pricing is not necessarily new.

“There have been studies highlighting that even as far back as 2010, test prep companies and their pricing based on zip codes increased prices for Asian American consumers,” explains Nguyen.

Nguyen said there are reports of people being charged based on where they are physically located: inside or outside the store.

Researchers are trying to determine whether customer data, including gender, spending behavior and browsing history, is being used against consumers financially.

We really don’t want people to have to pay fees based on their race or gender,” Nguyen said. ‘We don’t want people with lower incomes to have to pay more because they have fewer options to buy in stores.’

If that sounds like George Orwell’s 1984 dystopian novel, there’s more.

Eyeware, a company based in Switzerland, makes eye-tracking technology, which allows retailers to see what items shoppers are looking at and their behavior before purchasing.

“It’s not super widespread, but it’s being used more and more in larger chains,” says Spencer.

To avoid becoming a target, the Penguin Collective recommends that customers read the terms and agreements when using a shopping app so they know how their data is being used.

Spencer supports the Federal Trade Commission’s investigation into regulatory pricing, especially if it means more protection for consumers.

“We may find that certain stores have certain policies that we don’t agree with and that could be a question: Do we want to continue to use that store as a consumer? Because that’s the power we have,” Spencer said.