Surveillance Pricing- Your price is not THE price
- Dan Connors
- Aug 13
- 5 min read
“Surveillance capitalism unilaterally claims human experience as free raw material for translation into behavioral data.” ― Shoshana Zuboff, The Age of Surveillance Capitalism
“Surveillance pricing essentially gives Big Brother a look into your shopping cart. Part of affordability is making sure consumers get a fair shake. Exploiting peoples' data to drive up prices is the exact opposite.”— Mikie Sherrill, Governor of New Jersey (upon signing a state ban on surveillance pricing)
The cost of a thirty second Super Bowl ad starts at around $8 million dollars, not including the extensive production costs. Those ads reach an average of 125 million people worldwide and are watched and talked about for days after the big game. These ads are a huge gamble and often a waste of money. Super Bowl mass market ads are targeted at a large audience in the hopes of raising brand consciousness.
More common today in advertising is micro-targeting, where advertisers can pick and choose what demographic to appeal to- men, women, senior citizens, children, beer drinkers, or dog owners. Mass advertising wastes a lot of money by being ignored by the millions of consumers that wouldn't buy the product no matter how catchy the jingle or enticing the pitch. Thanks to the vast amount of data being harvested on all of us, advertisers are able to dig down and find the most profitable audience to whom to advertise their products.
We share personal details on social media, buying habits on loyalty apps, and credit information to every single company that requests them. Using our data, they can tell who is most likely to buy what, and when. And now there's a new wrinkle that should disturb every single shopper and employee out there.
Artificial intelligence (AI) can now predict how much we're willing to pay and be paid so that companies can optimize every sale and employment engagement. AI can also be used by companies to collude with others to jack up prices, knowing that there's little that can be done about it.
Once upon a time the price was the price, no matter who paid it or when. I first recognized what they call dynamic pricing with baseball tickets. Where there once was a set price for each level of the stadium, now there are fluctuating prices depending on who the team is playing, special offers, or food and beverage options. Weekend games with popular rivals can cost twice as much as weekday games with less popular ones. This is before the secondary market of ticket re-sellers even comes into the picture.
Dynamic pricing is now very popular for anything where attendance can vary depending on the timing. It makes sense from a corporate point of view, because they now know that consumers are willing to part with more money for things in higher demand. The only path out of this is to purchase expensive options like season tickets or season passes.
More insidious is surveillance pricing, where your data and buying patterns can determine the price you pay. That price can be higher or lower than what others pay for the exact same product, depending on what an algorithm calculates. We already use our personal data for mortgage rates and insurance, where companies can use zip codes, credit scores, and driving histories for or against us. But now the large corporations, with the help of AI, are getting into the act.
Big retailers like Amazon, Wal-Mart, and Target have been accused of manipulating prices that their customers see based on location data and purchase history. Once they know you're more likely to buy, they know the price can be raised, and the algorithms are much faster and better at figuring out the optimum price than we humans are. Apps like Doordash and Grubhub also use surveillance pricing to jack up prices when they think they can get away with it, and now airlines like Delta are doing the same.
The advertising that we already see every day is highly filtered based on our demographics and interests. Try doing a google search for trips to Bora Bora and see how many ads you start seeing on your websites and platforms for that very thing. Surveillance pricing takes that knowledge a step further.
Gig employers like Uber are discovering the benefits of surveillance pricing. Drivers that are eager to take on trips and maintain high acceptance rates are ideal for rideshare companies, and their reliability actually hurts them. Seeing that they will take on most anything that comes their way, the algorithm punishes eager drivers with lower fares, even if they are traveling in more dangerous areas. Drivers that are more picky may get fewer offers, but to invite them back into the fold the algorithm will give them more enticing fares. Uber maximized its profits by finding the optimum highest price a customer will pay and the lowest price a driver will accept, all in a matter of seconds.
What's the solution for those of us who don't want our lives controlled by powerful algorithms? For starters, contact your state representatives about limiting this abuse of personal data. New Jersey, Connecticut, and Maryland have already passed laws, and other states are looking at it. In election years, ask the candidates how they stand on this and keep them to it. Powerful corporate interests will oppose any sort of regulation on surveillance pricing.
Besides that, we all need to do all we can to protect our privacy. When shopping online, use a private browser like Chrome incognito or Safari private, or delete tracking cookies regularly to prevent data harvesting on your phone or computer. Be aware that loyalty programs keep close tabs on your purchases and don't always have your best interests in mind. Keep informed on the trends, shop in person when you can, and listen to your gut when a price seems out of line.
Don't be a sucker. Look around, ask around, and make sure you're getting the same price or better, no matter what your own personal history might predict.
The above is written by a human- me. What follows is written by AI when I asked it how to combat surveillance pricing. (Amazing how honest AI can be when asked how to thwart it.)
"To combat surveillance pricing—where companies use your personal data and algorithms to charge you individualized or higher prices—you can mask your digital footprint, limit data-sharing through loyalty programs, and support emerging state regulations and federal investigations. [1, 2, 3, 4, 5, 6]
Watch this short video overview to see helpful strategies and tools for spotting and avoiding algorithmic pricing tactics:
Practical Steps to Shield Your Data
Scramble your digital signals: Clear your browser cookies, use a Virtual Private Network (VPN) to mask your location, and install reliable third-party tracker blockers. [1, 2]
Compare across channels: Open items in an incognito window, or cross-check prices on a desktop computer versus a mobile app, as algorithms sometimes adjust prices based on your device type. [1, 2, 3, 4]
Audit loyalty programs: Be cautious about joining every store or airline rewards program, which often serve as pipelines for harvesting your detailed purchasing history and personal data. [1, 2, 3]
Use price trackers: Rely on independent extensions and price-history tools (like CamelCamelCamel for Amazon) to see if a current price is artificially inflated for your profile. [1]
Policy and Advocacy Actions
Support transparency laws: Several states (such as New York and Connecticut) have pushed for or enacted strict algorithmic pricing disclosures and bans on using personal data for individualized grocery or retail pricing. Tracking and supporting local consumer privacy legislation helps choke off the data supply chain. [1, 2, 3]
Report unfair practices: Regulatory bodies like the Federal Trade Commission (FTC) actively study and take public comments on predatory data-driven pricing practices. [1, 2]
"AI can’t read your mind, but it can predict your purchases with unsettling accuracy.
Rather than guessing, AI models use vast streams of behavioral data, statistical probability, and pattern recognition to anticipate what you want—often before you fully realize it yourself."
It's me again- I end with a clip from the 2002 movie, Minority Report, that predicted this exact thing.
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