Senate Scrutinises AI-Driven Personalised Pricing
A hearing led by Senator Josh Hawley examined whether companies can use browsing, location and purchasing data to charge different customers different prices for the same product.
A Senate Judiciary subcommittee has examined the growing use of artificial intelligence and consumer data in pricing, amid concerns that companies may be able to charge different customers different amounts for the same goods or services.
The hearing, chaired by Republican Senator Josh Hawley of Missouri, focused on what critics call “surveillance pricing”: the use of data such as browsing history, location, past purchases, device activity and online behaviour to predict a consumer’s willingness to pay.
Hawley said the practice could turn personal data collection into a system for extracting the highest possible price from each individual.
He cited ride-hailing data that he said showed Lyft charging 55 Missouri passengers 29 different prices for the same route at the same time.
The hearing did not establish that every price difference was based on personal data; fares can also vary because of demand, supply, route conditions and other factors.
The central concern is whether artificial intelligence allows companies to make such distinctions at a scale that consumers cannot see or challenge.
Robert Hedges, a former chief data officer at Visa, told senators that companies can draw on a broad range of information to assess “willingness to pay.” He said personalised pricing can benefit customers and companies in genuinely competitive markets, but warned that the same systems can automate price discrimination.
Hillary Caron of the United Food and Commercial Workers union urged Congress to act before the practice becomes embedded in grocery retail.
Electronic shelf labels, which allow prices to be changed remotely and quickly, have heightened concern because they could support rapid price adjustments.
Their use alone does not prove that a retailer is setting individual prices from customer data.
Walmart and Kroger are testing or expanding digital shelf-label technology.
Kroger has said it does not use actual or inferred personal data to personalise or raise prices.
No federal law specifically prohibits surveillance pricing, although Connecticut, Maryland and New Jersey have enacted restrictions on the use of personal data to set individual prices.
The hearing put federal action back on the agenda, but Congress has not yet advanced a nationwide measure.
The hearing, chaired by Republican Senator Josh Hawley of Missouri, focused on what critics call “surveillance pricing”: the use of data such as browsing history, location, past purchases, device activity and online behaviour to predict a consumer’s willingness to pay.
Hawley said the practice could turn personal data collection into a system for extracting the highest possible price from each individual.
He cited ride-hailing data that he said showed Lyft charging 55 Missouri passengers 29 different prices for the same route at the same time.
The hearing did not establish that every price difference was based on personal data; fares can also vary because of demand, supply, route conditions and other factors.
The central concern is whether artificial intelligence allows companies to make such distinctions at a scale that consumers cannot see or challenge.
Robert Hedges, a former chief data officer at Visa, told senators that companies can draw on a broad range of information to assess “willingness to pay.” He said personalised pricing can benefit customers and companies in genuinely competitive markets, but warned that the same systems can automate price discrimination.
Hillary Caron of the United Food and Commercial Workers union urged Congress to act before the practice becomes embedded in grocery retail.
Electronic shelf labels, which allow prices to be changed remotely and quickly, have heightened concern because they could support rapid price adjustments.
Their use alone does not prove that a retailer is setting individual prices from customer data.
Walmart and Kroger are testing or expanding digital shelf-label technology.
Kroger has said it does not use actual or inferred personal data to personalise or raise prices.
No federal law specifically prohibits surveillance pricing, although Connecticut, Maryland and New Jersey have enacted restrictions on the use of personal data to set individual prices.
The hearing put federal action back on the agenda, but Congress has not yet advanced a nationwide measure.
