Legislation Proposed to Curb Surveillance Pricing by Businesses
In an era where personal data increasingly dictates consumer experiences, Senator Ruben Gallego has put forth a legislative proposal aimed at halting the use of personal information for individualized pricing strategies by businesses. The proposed One Fair Price Act seeks to eliminate the practice of “surveillance pricing,” where detailed consumer data is leveraged to determine unique prices for the same products.
Senator Gallego expressed concerns about the current state of data usage, stating, “They’re collecting so much information that it’s not really capitalism anymore. It’s truly exploitative at this point.” This sentiment is backed by early findings from the Federal Trade Commission indicating retailers are employing a range of personal data, from location to online behavior, to establish targeted pricing.
Under the proposed legislation, businesses would be prohibited from using such data to set different prices for the same product, with the Federal Trade Commission, state attorneys general, and individuals empowered to enforce this rule. However, insurance and credit companies would be exempt. The act does allow for group discounts and loyalty programs, provided they are equitable in their treatment of consumers.
Lindsay Owens, the executive director of Groundwork Collaborative, underscored the necessity of such legislation, citing examples like Delta Air Lines and Starbucks. Delta has informed investors about the potential to use AI for personalized pricing, and Starbucks has reportedly engaged in surveillance pricing, as reported by the Washington Post.
Owens remarked on the emerging landscape, “This is basically a new frontier of pricing advisors, pricing consultants, pricing AI tech companies that really build the underlying technology and infrastructure that these larger retailers can use in setting pricing.”
Coinciding with the introduction of Gallego’s bill, the Groundwork Collaborative and Consumer Reports released a study examining pricing practices on platforms like Instacart. While no direct evidence of demographic-based pricing was found, the investigation indicates that major companies might be utilizing consumer behavior data for pricing strategies.
The future of Gallego’s legislation remains uncertain as it faces a Republican-controlled Congress and President Trump’s approval. Gallego, however, maintains optimism, stating, “Everything takes time. It doesn’t matter when you introduce it and who (introduces it), whether you’re a Democrat or Republican, so I’m willing to work it. But I think that this can have a lot of support across the board.”
In related news, President Trump recently signed an executive order to probe potential price fixing and anti-competitive actions within the food supply chain. The White House has yet to comment on Gallego’s legislative proposal.
