Are you a victim of AI abuse in surveillance pricing?

Nearly a decade ago, Uber revealed that customers were more willing to pay active prices when their phones were running low on battery. That data point sparked a widespread belief that Uber and other ride-hailing apps employ algorithms to adjust each rider’s price based on their behavior and willingness to pay—a practice known as “surveillance pricing.” A related myth—that airlines use search history to raise the prices of flights you’re interested in – is equally common, although untrue.

Monitoring price list may not be widely available yetBut experts say it’s on the horizon, with consultants starting to pitch surveillance pricing models to companies across industries. The Federal Trade Commission announced today that it’s ordering eight companies that offer AI surveillance pricing products and services to provide information about how their pricing schemes affect privacy, competition and consumer protections, The FTC announced today.

Tracked pricing — often called “dynamic pricing,” “personalized pricing,” or “price optimization” — involves offering different prices to individual consumers for the same products based on a combination of factors, including the device they’re shopping with, their location, demographics, credit history, and browsing and purchasing history.

“Companies that collect Americans’ personal data can put people’s privacy at risk. Now, companies can use this vast trove of personal data to charge people higher prices,” FTC Chairwoman Lina Khan said in a statement. “Americans deserve to know whether companies are using detailed consumer data to implement surveillance pricing, and the FTC’s investigation will shed light on this mysterious ecosystem of price brokers.”

Companies have already experimented with implementing Uber-style active pricing. JetBlue “Peak” and “off-peak” prices were quietly introduced to checked-bag fees in March. Walmart plans to introduce digital price tags to 2,300 stores over the next few years, allowing it to change prices on products based on a number of factors, including weather, whether items are nearing expiration and more. Wendy’s has said it will introduce “dynamic pricing” in 2025. Amazon had a secret algorithm called Project Nessie that allowed it to estimate how much it could raise prices before competitors noticed and changed theirs, too.

These pricing models, while variable, are somewhat different from the pricing used for monitoring, which relies on information about an individual consumer to determine how much they are willing to pay for a particular product.

The FTC’s orders were sent to Mastercard, Revionics, Bloomreach, Chase, Task, Pros, Accenture and McKinsey & Co., the FTC announced in a press release. They were issued under the FTC’s 6(b) authorization, which allows it to conduct investigations without any specific law enforcement purpose.

“These eight companies advertise their use of artificial intelligence and machine learning as part of the services they offer, often claiming that they can use historical and real-time customer information to create unique shopping experiences,” an FTC official said on a call with reporters before the announcement, adding that none of the companies that issued the orders were accused of any wrongdoing. “We’re trying to expose opaque practices that have the potential to radically change the way consumers buy goods and services. We want to make sure that pricing for surveillance doesn’t hurt certain communities, like women and rural consumers.”

Businesses are asked to provide information on:

• The types of monitoring products and services they have manufactured, developed, or licensed to a third party
• Data sources used for each product or service
• Who do they offer products and services related to monitoring prices to?
• How does this affect monitored consumers and prices?

An FTC official said during a call with reporters that the study was necessary because the extent to which companies are using surveillance pricing is currently unknown. Media reports suggest that companies in a range of sectors — including grocery stores, restaurant chains, travel and hospitality — are considering or have already implemented surveillance pricing.

“The technology is there, the incentives are there, the data is certainly there to guide this,” an FTC official told reporters. “And now we’re actually seeing this consulting industry potentially offering to help companies personalize prices, which gives us strong reason to believe that this practice is likely to continue to grow.”