{"id":3319,"date":"2025-10-15T11:36:34","date_gmt":"2025-10-15T11:36:34","guid":{"rendered":"https:\/\/pronews.in\/index.php\/2025\/10\/15\/surveillance-pricing-why-you-might-be-paying-more-than-your-neighbour\/"},"modified":"2025-10-15T11:36:34","modified_gmt":"2025-10-15T11:36:34","slug":"surveillance-pricing-why-you-might-be-paying-more-than-your-neighbour","status":"publish","type":"post","link":"https:\/\/pronews.in\/index.php\/2025\/10\/15\/surveillance-pricing-why-you-might-be-paying-more-than-your-neighbour\/","title":{"rendered":"\u2018Surveillance pricing\u2019: Why you might be paying more than your neighbour"},"content":{"rendered":"
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You go into a store to buy a two-litre bottle of milk at your local supermarket and pay $3. But the person before you in the queue paid $3.50. And the person after you paid $2. What if those prices were based on your personal data or circumstances, or even the battery power on your phone?<\/p>\n

This may sound like science fiction, but it\u2019s not as far-fetched as you might think.<\/p>\n

In July, US group Delta Air Lines revealed that approximately 3 percent of its domestic fare pricing is determined using artificial intelligence (AI) \u2013 although it has not elaborated on how this happens. The company said it aims to increase this figure to 20 percent by the end of this year.<\/p>\n

The news raised concerns among consumers that Delta might be using customers\u2019 data to determine what to charge them. So, US Senators Mark Warner, Ruben Gallego and Richard Blumenthal sent a letter<\/a> to Delta Air Lines requesting further information about its reported plans to implement AI-driven \u201cdynamic pricing\u201d.<\/p>\n

\u201cDelta\u2019s current and planned individualised pricing practices not only present data privacy concerns but will also likely mean fare price increases up to each individual consumer\u2019s personal \u2018pain point\u2019 at a time when American families are already struggling with rising costs,\u201d the letter stated.<\/p>\n

Although Delta did not deny using AI to set prices, it replied, telling the senators that it does not use it for \u201cdiscriminatory or predatory pricing practices\u201d.<\/p>\n

According to former Federal Trade Commission Chair Lina Khan, however, some companies are able to use your personal data to predict what they know as your \u201cpain point\u201d \u2013 the maximum amount you\u2019re willing to spend for a specific good or service.<\/p>\n

In January, the US\u2019s Federal Trade Commission (FTC), which regulates fair competition, reported on a surveillance pricing study<\/a> it carried out in July 2024.<\/p>\n

It found that companies can collect data directly through account registrations, email sign-ups and online purchases in order to do this. Additionally, web pixels installed by intermediaries track digital signals including your IP address, device type, browser information, language preferences and \u201cgranular\u201d website interactions such as mouse movements, scrolling patterns and video viewing behaviour.<\/p>\n

This is known as \u201csurveillance pricing\u201d.<\/p>\n

What is surveillance pricing?<\/h2>\n

Surveillance pricing is the practice of monitoring consumer data to set individualised prices in order to maximise profits for the retailer.<\/p>\n

Put simply, having access to your personal information enables retailers to charge you the most they think you will be willing to pay.<\/p>\n

In a 2024 research paper<\/a>, Oren Bar-Gill, legal scholar and economist at New York University, describes surveillance pricing as follows: \u201cFuelled by big data, algorithmic price discrimination enables sellers to parse the population of potential customers into finer and finer subcategories \u2013 each matched with a different price.<\/p>\n

\u201cIn some cases, sellers are even able to set personalised pricing, marching down the demand curve and setting a different price for each consumer.\u201d<\/p>\n

In an interview with economist Robert Reich in July this year, Khan said: \u201cEvidence shows that ride-sharing apps are charging different prices for the exact same rides at the exact same time. It\u2019s not entirely clear, but researchers ran tests and found that riders with lower battery life on their phone were charged more.\u201d<\/p>\n

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Delta Airlines reportedly wants to use AI to set individualized ticket prices for passengers.<\/p>\n

It’s the latest company to embrace a shady tactic called “surveillance pricing” that weaponizes your personal data.<\/p>\n

Watch Lina Khan explain how it works. pic.twitter.com\/pnRJTyLZq6<\/a><\/p>\n

\u2014 Robert Reich (@RBReich) July 16, 2025<\/a><\/p>\n<\/blockquote>\n

Uber denies it is deliberately targeting any of its app users with higher prices. However, its former head of economic research, Keith Chen, did reveal in an NPR interview<\/a> in 2016 that the company had discovered that users with low battery life were more likely to accept surge pricing.<\/p>\n

\u201cUber has found that those with a low battery tend to accept the surge price regardless, because they need a ride home that minute, instead of waiting an extra 15 for the surge to possibly go down.<\/p>\n

\u201cWe absolutely don\u2019t use that to kind of push you a higher surge price, but it\u2019s an interesting kind of psychological fact of human behaviour.\u201d<\/p>\n

Then, in 2023, an investigation by Belgian newspaper La Derniere Heure also found that prices for the same journey on the Uber app can be different for different users. In particular, its test found that the same ride from the newspaper\u2019s office in Brussels would cost more ordered from a phone with 12 percent battery \u2013 17.56 euros ($20.51) than from one with 84 percent \u2013 16.60 euros ($19.39).<\/p>\n

When approached for comment, Uber denied this, stating: \u201cUber does not take into account the phone\u2019s battery level to calculate the price of a trip. The dynamic pricing applied to trips booked via Uber is determined by the existing demand for rides and the supply of drivers who can respond to it.\u201d<\/p>\n

How does surveillance pricing work, exactly?<\/h2>\n

Retailers can monitor your online behaviour by recording what you click on, your browsing time, location and device choice and combine all this with your purchase history to determine your \u201cprice sensitivity\u201d.<\/p>\n

\u201cPrice sensitivity\u201d typically measures how much customers\u2019 buying behaviours change in response to shifts in product prices.<\/p>\n

To do all this, they use AI surveillance tools to produce pricing recommendations. These sophisticated systems operate across a spectrum, from broad store-wide pricing strategies to personalised, real-time price adjustments tailored to individual user behaviour patterns.<\/p>\n

A wide range of consumer-facing businesses \u2013 both online-only and high-street retailers \u2013 including grocery, apparel, health and beauty, home goods, convenience, hardware and general merchandise retailers, were included in the January FTC surveillance pricing study.<\/p>\n

According to the study, these are some of the ways retailers are using surveillance pricing to various degrees:<\/p>\n