A practice known as surveillance pricing, or personalized pricing, is drawing increased attention as companies are accused of leveraging consumer data to set individual prices. This controversial tactic, which involves analyzing data such as browsing history, purchase behavior, and location, aims to determine how much a consumer is willing to pay.
Experiments conducted by The Post have highlighted significant price disparities for identical services and products. In one instance, two individuals requesting Uber rides to the same destination at the same time were charged vastly different amounts, with one ride costing nearly 10% less than the other. Similar experiments with Lyft showed even greater price differences, with one user paying almost 28% more for the same trip. Uber attributed these fluctuations to "small discrepancies" like GPS location, timing, and fluctuating marketplace conditions, but the consistent timing and location of the test rides challenge this explanation. Lyft did not respond to requests for comment.
Retail Product Pricing Variations
Beyond ridesharing, concerns extend to major retailers. Tests involving Kroger revealed price differences for everyday grocery items. For example, the same cut of beef was priced $1 per pound higher on one browser than another. Gallons of milk and ice cream also showed price variations, with one consumer paying more than their counterpart for the identical Kroger-branded products. While Kroger stated it does not use surveillance pricing and that prices can vary by location and promotions, the observed differences were noted for the same product.
Target has also faced accusations, including a past lawsuit settlement. In recent experiments, a 12-pack of applesauce pouches and a can of Spam were priced differently for two individuals. Target suggested that saved browser locations might account for these disparities, emphasizing that they do not use guest data to raise prices for individuals. They stated that pricing variations reflect local factors such as operating costs and competition, not individual guest data.
Regulatory Landscape and Consumer Concerns
Experts note that personalized pricing is currently legal but operates in a legally gray area. The Federal Trade Commission (FTC) Act, Section 5, prohibits unfair or deceptive acts or practices, but its vague language has not allowed the FTC to explicitly ban personalized pricing. However, the FTC has proposed new rules warning corporations against deceptive pricing practices based on personal data and plans to "enforce the law aggressively." FTC Chairman Andrew Ferguson stated that consumers expect listed prices to be the same for everyone, not an estimate of willingness to pay based on personal data.
Three states—New Jersey, Maryland, and Connecticut—have enacted laws to ban or restrict surveillance pricing. New York has also passed legislation to address the practice, though it has not yet been signed into law. Experts caution that these opaque pricing tactics can leave consumers unaware of how their data is being used to influence what they pay, likening personalized pricing to "retail's quicksand."