FTC Proposes Action Against Surveillance Pricing Amid Rising Criticism

Have you noticed a sudden jump in prices after searching for flights online, only to find your planned purchase costing more? It’s called surveillance pricing. Companies monitor your search history and personal data to determine what you’re likely to purchase, adjusting costs to target your personal pain point — the amount you’re willing to pay.

Although frustrating, if you need the flight, you pay the price. Marketers use your browsing data to identify friction points, betting you’ll pay extra to avoid hassle. These practices have grown so widespread and unpopular that the Federal Trade Commission proposed a policy requiring companies to disclose when they use detailed personal information to set individual prices.

Comments on the proposal, open until September 18, indicate strong opposition. Consumers shared experiences of fluctuating prices, labeling surveillance pricing as predatory and devious. Many Americans remain unaware of the extent of data generated and its potential use, as noted by FTC staffers.

After extensive information gathering, commission staff identified several enforcement targets. These include raising prices on baby items for new parents or food delivery costs for home-bound individuals. They cannot ban these practices entirely without new legislation, but they aim to hold companies accountable for undisclosed personalized pricing.

Maryland took proactive steps, instituting a law effective October 1 banning personal data-driven pricing in large grocery stores and delivery services. New Jersey followed, prohibiting electronic shelf labels that risk personalized pricing based on phone data.

State-level actions continue amidst legislative hurdles. A bill proposed by Assemblymember Christopher M. Ward faces opposition from lobbyists but seeks to tackle affordability and transparency head-on. Business groups contest these concerns, arguing data primarily serves to recommend products or discounts.

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As the AI field expands, major universities in California such as USC and UCLA introduce courses to align education with tech industry demands. Alongside broadening AI education, California confronts environmental and energy issues approaching legislative deadlines.

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