{"id":64975,"date":"2025-09-15T07:00:09","date_gmt":"2025-09-15T07:00:09","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/64975\/"},"modified":"2025-09-15T07:00:09","modified_gmt":"2025-09-15T07:00:09","slug":"what-is-surveillance-pricing-deseret-news","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/64975\/","title":{"rendered":"What is surveillance pricing? \u2013 Deseret News"},"content":{"rendered":"<ul>\n<li>The FTC is investigating how companies use personal and behavioral data to set individualized prices.<\/li>\n<li>Critics say surveillance pricing threatens consumer welfare and may cross constitutional lines.<\/li>\n<li>A lack of robust data privacy protections is at the heart of the issue, according to experts<\/li>\n<\/ul>\n<p class=\"c-paragraph\">They know who you are, where you live, how much money you make and where you spent your last vacation. <\/p>\n<p class=\"c-paragraph\">They\u2019re watching what websites you visit, tracking your mouse movements while you\u2019re there and what you\u2019ve left behind in virtual shopping carts. Mac or PC? iPhone or Android? Your preferences have been gathered and logged.<\/p>\n<p class=\"c-paragraph\">And they\u2019ve got the toolkit, powered by artificial intelligence software, to assemble all this information to zero in on exactly how much you\u2019re likely willing to pay for any product or service that might strike your fancy. <\/p>\n<p class=\"c-paragraph\">The \u201cthey\u201d is a combination of retailers and service providers, social media operators, app developers, big data brokers and a host of other entities with whom you have voluntarily and involuntarily shared personal and behavioral information. And they\u2019ve even come up with new labels to make you feel better about the systems that are using your personal data to set a custom price.<\/p>\n<p class=\"c-paragraph\">Dynamic pricing. Personalized pricing. Even \u201cdiscount pricing.\u201d<\/p>\n<p>FTC investigates surveillance pricing<\/p>\n<p class=\"c-paragraph\">But the Federal Trade Commission and others have another name for it: surveillance pricing.<\/p>\n<p class=\"c-paragraph\">In an ongoing investigation launched last year, the FTC is looking into the practice of surveillance pricing, a term for systems that use personal consumer data to set individualized prices \u2014 meaning two people may be quoted different prices for the same product or service, based on what a company predicts they are willing \u2014 or able \u2014 to pay.<\/p>\n<p class=\"c-paragraph\">Part of the FTC\u2019s mandate includes working to prevent fraudulent, deceptive and unfair business practices along with providing information to help consumers identify and avoid scams and fraud, according to the agency.<\/p>\n<p class=\"c-paragraph\">In a preliminary <a href=\"https:\/\/www.ftc.gov\/policy\/advocacy-research\/tech-at-ftc\/2025\/01\/surveillance-pricing-update-work-ahead\" target=\"_blank\" rel=\"nofollow noopener\" title=\"https:\/\/www.ftc.gov\/policy\/advocacy-research\/tech-at-ftc\/2025\/01\/surveillance-pricing-update-work-ahead\">report<\/a> in January, the agency highlighted actions it\u2019s already taken to quell the rise of surveillance pricing amid its effort to gather more in-depth information on the practice:<\/p>\n<ul>\n<li>One complaint issued by the FTC included allegations that a mobile data broker was harvesting consumer information and sensitive location data, including visits to health clinics and places of worship which was later sold to third-parties. <\/li>\n<li>The agency said it issued the first-ever ban on the use and sale of sensitive location data by a data broker which allegedly sold consumer location data it collected from third-party apps and by purchasing location data from other data brokers and aggregators. <\/li>\n<li>Another FTC complaint alleged that the data broker InMarket used consumers\u2019 location data to sort them into particularized audience segments \u2014 such as \u201cparents of preschoolers,\u201d \u201cChristian church goers,\u201d \u201cwealthy and not healthy\u201d \u2014 which it then provided to advertisers. <\/li>\n<\/ul>\n<p class=\"c-paragraph\">Last year, the FTC issued orders to eight companies that offer surveillance pricing products and services that incorporate data about consumers\u2019 characteristics and behavior. The orders, according to the agency, seek information about the potential impact these practices have on privacy, competition and consumer protection.<\/p>\n<p class=\"c-paragraph\">\u201cFirms that harvest Americans\u2019 personal data can put people\u2019s privacy at risk. Now firms could be exploiting this vast trove of personal information to charge people higher prices,\u201d said then-FTC Chair Lina M. Khan. \u201cAmericans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing, and the FTC\u2019s inquiry will shed light on this shadowy ecosystem of pricing middlemen.\u201d<\/p>\n<p>AI-driven consumer profiling<\/p>\n<p class=\"c-paragraph\">George Slover, general counsel and senior counsel for competition policy at the <a href=\"https:\/\/cdt.org\/\" target=\"_blank\" rel=\"nofollow noopener\" title=\"https:\/\/cdt.org\/\">Center for Democracy and Technology<\/a>, has his own term for the practice of using personal information to construct prices for individuals: \u201cbespoke pricing.\u201d He said it poses a fundamental threat to consumer welfare and free market principles. <\/p>\n<p class=\"c-paragraph\">Proponents of individualized pricing systems have argued that the method can send prices both directions \u2014 higher prices for some, lower prices for others. But Slover warned that, unlike uniform pricing, bespoke pricing enabled by \u201cbig data\u201d and artificial intelligence gives companies little incentive to offer discounts to those who can\u2019t afford market prices.<\/p>\n<p class=\"c-paragraph\">\u201cTheoretically, maybe,\u201d Slover told the Deseret News. \u201cBut as a practical matter what the sellers will do is maximize their prices. There\u2019s a lot less incentive to lower the price for someone than raise the price for someone.\u201d<\/p>\n<p class=\"c-paragraph\">Slover characterized the FTC investigation as \u201cvery useful\u201d and said it could reveal more about the methodologies behind bespoke pricing and potentially lead to appropriate restrictions under existing law.<\/p>\n<p class=\"c-paragraph\">For now, he said, consumers have few defenses beyond masking their data. <\/p>\n<p class=\"c-paragraph\">\u201cPotential ways for consumers to change their profile include working through a (virtual private network) internet connection, using an anonymized intermediary or even setting up a bogus, fictional profile \u2026 looking to reduce how much they have to pay,\u201d Slover said. <\/p>\n<p class=\"c-paragraph\">But he cautioned that vast troves of consumer data on virtually every internet user have already been harvested and repackaged by brokers.<\/p>\n<p class=\"c-paragraph\">Slover, who has worked on antitrust and competition law for more than 35 years including stints with the U.S. Department of Justice and U.S. House of Representative\u2019s Judiciary Committee, tied the debate over surveillance pricing to the broader need for comprehensive privacy protections. <\/p>\n<p class=\"c-paragraph\">\u201cMy organization, the Center for Democracy and Technology, was founded 30 years ago when the internet was getting off the ground,\u201d he said. \u201cOne of the issues we\u2019ve been focusing on since the beginning is the privacy of data \u2026 and getting Congress to implement a strong, comprehensive privacy law.\u201d<\/p>\n<p>Looking to protect data privacy<\/p>\n<p class=\"c-paragraph\">Utah state Rep. Tyler Clancy, R-Provo, said he\u2019s not willing to wait for Congressional action on data privacy, which he sees as the critical underlying issue behind surveillance pricing.<\/p>\n<p class=\"c-paragraph\">\u201cThe privacy aspect is the biggest issue for me,\u201d Clancy told the Deseret News. \u201cCompanies use that data to do business \u2026 but this is an area where we need some guardrails.<\/p>\n<p class=\"c-paragraph\">\u201cIf you\u2019re creating a price for someone from immutable characteristics \u2014 race, faith, gender, ethnicity \u2014 that runs into constitutional concerns.\u201d<\/p>\n<p class=\"c-paragraph\">Clancy said he is exploring \u201cconsent provisions\u201d to ensure Utahns can know if their data is being used in pricing systems. He cited the response to recent news stories generated after a Delta Air Lines executive indicated in an earnings call that the carrier was testing out artificial intelligence technology that could set fares based on \u201cthe amount people are willing to pay for the premium products related to the base fares.\u201d Delta issued a follow-up <a href=\"https:\/\/news.delta.com\/delta-responds-misinformation-around-ai-pricing#:~:text=There%20is%20no%20fare%20product,in%20privacy%2C%20pricing%20and%20advertising.\" target=\"_blank\" rel=\"nofollow noopener\" title=\"https:\/\/news.delta.com\/delta-responds-misinformation-around-ai-pricing#:~:text=There%20is%20no%20fare%20product,in%20privacy%2C%20pricing%20and%20advertising.\">statement<\/a>, clarifying that it was not using any manner of \u201cindividualized pricing\u201d to set air fares based on customer data.<\/p>\n<p class=\"c-paragraph\">\u201cThere is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized prices based on personal data,\u201d said Delta chief external affairs officer Peter Carter.<\/p>\n<p class=\"c-paragraph\">But that qualification came after an uproar had already begun, Clancy said, and the issue has drawn interest from across the political spectrum.<\/p>\n<p class=\"c-paragraph\">\u201cWhen this news story originally broke, it was a shock to people on the political right and the political left,\u201d Clancy said. <\/p>\n<p class=\"c-paragraph\">Clancy said he\u2019s working on a proposal for the 2026 session of the Utah Legislature and aims to compel transparency in how business entities use personal information in pricing systems for products and services. <\/p>\n<p class=\"c-paragraph\">\u201cSunshine is the best disinfectant and overall that\u2019s the goal I\u2019m trying to achieve here,\u201d Clancy said. \u201cIt will lead to a better and freer market and that\u2019s a win for everyone.\u201d<\/p>\n<p>Targeted advertising came first<\/p>\n<p class=\"c-paragraph\">When it comes to names, BYU marketing professor John Howell isn\u2019t a fan of surveillance pricing, a term he believes is unnecessarily inflammatory. But he says the growing controversy over the practice isn\u2019t about whether it\u2019s possible or not, but whether consumers will tolerate it.<\/p>\n<p class=\"c-paragraph\">\u201cThis isn\u2019t a new phenomenon,\u201d Howell said in a Deseret News interview. \u201cWe\u2019ve been paying attention to this at least from the early 2000s, individual level pricing, first-degree price discrimination. Charge every person a specific price based on their willingness to pay.\u201d<\/p>\n<p class=\"c-paragraph\">Howell said economists have long predicted the advent of such models, but noted industry made a first stop in the advertising realm.<\/p>\n<p class=\"c-paragraph\">\u201cIt\u2019s been conjectured as coming for at least 20 years,\u201d he said. \u201cIndustry went to targeted advertising before targeted pricing. And I\u2019m surprised that they went for that when targeted pricing is more profitable.\u201d<\/p>\n<p class=\"c-paragraph\">Even if the practice is logical from a business perspective, Howell said consumer reaction is also predictably negative. <\/p>\n<p class=\"c-paragraph\">\u201cAny time customers start to see price discounts, or individual pricing, they absolutely hate it,\u201d he said. <\/p>\n<p class=\"c-paragraph\">And that tension isn\u2019t new either. Howell highlighted that the Sherman Antitrust Act, passed in 1890, was \u201clargely inspired by price discrimination by the railroad industry back at the turn of the 20th century.\u201d<\/p>\n<p class=\"c-paragraph\">From an academic perspective, Howell said, price discrimination should benefit more consumers than it harms. <\/p>\n<p class=\"c-paragraph\">\u201cThe theory is, price discrimination almost always leads to lower average prices,\u201d Howell said. \u201cThat doesn\u2019t mean that every person is going to pay less. Also, it generally increases the availability of goods and services to lower-income customers.<\/p>\n<p class=\"c-paragraph\">\u201cIf you have price discrimination you can charge the people that can afford to pay a lot and less for those who cannot afford it. That\u2019s generally what happens.\u201d<\/p>\n<p class=\"c-paragraph\">In practice, however, Howell notes entities with the most data, and by default the most control over individual pricing systems, can easily disrupt the realm of competition.<\/p>\n<p class=\"c-paragraph\">\u201cIt\u2019s not the theory of price discrimination that\u2019s been disrupted,\u201d he said. \u201cWhat the data has done in our current economic system is tend to reward big players with increased power and lock out all the smaller players. As soon as they\u2019re not competitive, the theory falls apart. If I was a policy maker, that\u2019s what I would target, keeping big tech from accumulating so much power.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The FTC is investigating how companies use personal and behavioral data to set individualized prices. Critics say surveillance&hellip;\n","protected":false},"author":2,"featured_media":64976,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[261],"tags":[291,289,290,18,19,17,2273,82],"class_list":{"0":"post-64975","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-eire","12":"tag-ie","13":"tag-ireland","14":"tag-news-feed-national","15":"tag-technology"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/64975","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=64975"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/64975\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/64976"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=64975"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=64975"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=64975"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}