That price you’re seeing online may have been picked specifically for you

Consumers are increasingly concerned about the way online prices are determined, moving beyond the general trend of rising costs. Recent reports and a new book indicate that algorithms are now setting individualized prices rather than relying on product quality or market value. This practice, known as surveillance-based price discrimination, is causing prices to vary significantly from one customer to another.

Lindsay Owens, president and CEO of the Washington think tank Groundwork Collaborative, delves into the mechanics of this pricing method in her book Gou ged: The End of a Fair Price — And What That Means For Your Wallet. The book reveals how corporations employ AI, data collection, and algorithms to track customers' purchasing habits, leading them to pay higher prices for everyday items such as airline tickets and groceries.

In a Senate Judiciary Subcommittee hearing, Owens and other witnesses testified about how major corporations like Walmart, Kroger, Instacart, and airlines use customer data to manipulate pricing. This practice not only undermines transparency and predictability but also makes it difficult for families to budget and compare prices.

Companies can predict individual shoppers' willingness to pay by analyzing their purchase history, location, loyalty programs, and even whether they engage in comparison shopping. While some witnesses criticized these practices, others, like marketing professor Z. John Zhang, argued that personalized pricing could reduce profits, as it intensifies competition.

The Federal Trade Commission has warned that corporations engaging in such tactics may be breaking the law by charging different prices to consumers based on their personal data. Owens believes that government intervention is necessary to address this issue, such as banning manipulative pricing practices or requiring merchants to disclose personalized pricing.

She also proposes a Shopper’s Bill of Rights, which includes expectations like "pricing products, not people" and the assurance that "the price you see is the price you pay." According to a recent poll, around two-thirds of surveyed Americans support these policies, indicating that consumers may need to fight to secure fair pricing in the digital age.