FTC Launches Probe into 'Surveillance Pricing'
The FTC investigates "surveillance pricing," where AI adjusts prices based on customer data. Eight companies, including Mastercard and JPMorgan Chase, face inquiries. Concerns about privacy risks are raised. Companies like Mastercard and Revionics cooperate.
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The Federal Trade Commission (FTC) has initiated an investigation into "surveillance pricing," a practice where companies use artificial intelligence to adjust prices based on customer data. This allows companies to charge different prices to different customers. The FTC has issued mandatory requests for information to eight companies, including Mastercard, JPMorgan Chase, Accenture, and McKinsey, who use AI and customer data to tailor prices. FTC Chair Lina Khan expressed concerns about the potential privacy risks associated with companies leveraging personal data to set prices. The investigation aims to understand the products and services offered, data collection methods, customer profiles, and the impact on pricing. The FTC is conducting this inquiry under its 6(b) authority to gather information for analysis without immediate enforcement action. Some companies, like Mastercard and Revionics, have stated their willingness to cooperate with the FTC, with Revionics clarifying that it does not engage in consumer surveillance activities.
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8 commentsIt's already a bit strange when I'm on a plane and know the person sitting next to me paid 1/2 what I did, and they're aggressively stealing the arm-rest.
It's different when the airline says "we know you were looking for a flight on this day and time because you checked twice before buying a ticket, so each time you checked, we increased the price, because we figured you were more likely to buy.
This example has nothing to do with the market, it's strictly targeting me as an individual.
I had an experience with Uber where I cut myself and had to get stitches, so put my destination as a local hospital. Instant 3x surge pricing, but what am I going to do, bleed out? I got in the car and the driver said "I was about to switch off because it's been completely dead all night." It was immediately obvious to me that Uber would go "oh, you need to go to the hospital, you'll pay more", preying on the need.
pull up to a fuel pump, price boxes above the individual fuel hoses say “To learn pricing, for your convenience, please scan your phone’s NFC chip so we can determine your personal income and economy-wide purchase history.”
“Oh, it looks like you’re in the mor17-36-97wcmyoal-93 pricing group!”
“However, our scan indicates there are 2 other individuals in your automobile. To ensure an accurate pricing model, for your convenience please scan person1 and person2 mobile NFC chips.”
“Oh, we see passenger number 3 is in raf79-93-18hswcpfu—32 pricing. Thank you!
“Unfortunately, we’re unable to determine passenger 2’s income and economy-wide purchase history due to their lack of NFC ID. For your convenience please see teller inside for pricing options.”
“If you question the validity of our estimations, please send a certified postal letter to our headquarters with the price ids previously shown on screen during the passenger scans. (The postal mailing address can be conveniently received by request from welovecustomers@fuelUSA.com Please allow 6-8 weeks for processing and we’ll get that postal address to you in a timely manner.)
just let me fuel my car… please…
onto the grocery store we go… “Please open our convenient app and scan the item for pricing.” … “This app requires the permissions…”
and just for the record, since some or our tech monarchs fail to tell the difference, this is dystopian, bad. not good. this is not a “neat future.” even if we throw some neon music on top, it’s still horrifying.
Lina Khan's FTC continues to look where attention is warranted. I'm not sure there's anything necessarily bad going on here, or presumably there's some bad/some good, but it's definitely something that regulators should be paying close attention to. Tech + data enables totally new and very opaque pricing schemes.
Remote hosted disposable web browser instance and add items to non logged in cart then login once you see the prices so the offline cart is merged to your account?
Does anyone know a reliable method?
Imagine if your airline knew precisely how badly you needed to be at your destination and knew your $ net worth. Flying to your father’s funeral? That’ll be 20k. Flying for cancer treatment? 30k.
Are you the kind of person who reads articles against airline pricing? That means you're probably not a loyal customer and therefore we'll charge you extra.
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Airlines' history of price-fixing led to algorithmic pricing adoption in various sectors. DOJ and FTC pursue lawsuits against algorithmic price-fixing schemes to prevent collusion, impacting future pricing practices.
AI is quietly being used to pick your pocket
AI enables personalized pricing in retail and other sectors based on individual data like age and mood, raising concerns about bias, inflation, and privacy. Calls for regulatory oversight to prevent exploitation are increasing.
FTC Issues Orders to Eight Companies Seeking Information on Surveillance Pricing
The Federal Trade Commission orders eight companies to provide details on surveillance pricing using consumer data. Concerns raised about transparency and consumer protection in personalized pricing practices. Investigation targets firms like Mastercard and JPMorgan Chase.
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The FTC, DOJ, and global antitrust enforcers, led by FTC Chair Lina M. Khan, issued a joint statement on AI competition, emphasizing safeguarding fair competition, addressing risks, and monitoring consumer impacts.