Feds Demand Info on Surveillance Pricing From 9 Companies, Including Walmart, Uber, and Delta

The U.S. Federal Trade Commission sent a letter to nine different companies on Wednesday demanding documents related to surveillance pricing, the practice of setting an individualized price for a given customer based on their data. The companies include Delta, United, JetBlue, Lyft, Uber, DoorDash, Instacart, Target, and Walmart, all of which have been mentioned in news reports in recent years for potentially engaging in some form of surveillance pricing. However, most of the companies have denied the practice, and those caught doing it have insisted it was merely part of a pricing experiment. The FTC’s document request says that each company has 45 days to respond, and it will probe not just how consumers are impacted but how workers are paid. Activists frequently note that gig workers can get screwed when companies use technological tricks to see how little money workers will accept. “We intend to scrutinize the opaque methodology that some companies in these industries may be using to determine how much consumers pay or how much gig workers are paid for the same product or service,” FTC Chairman Andrew N. Ferguson said in a press release. “Consumers deserve to know whether companies use their web surfing habits or other personal data to estimate the highest price they can charge each consumer,” continued Ferguson. “Workers also deserve to know if their compensation is affected by how companies use their personal data.” President Donald Trump’s FTC announced in August that companies may be breaking the law if they engage in surveillance pricing. Trump’s FTC uses the term “personalized pricing,” the preferred term of the companies that use it. The FTC document request also uses the term “super intelligence,” the Trump regime’s favored term for artificial intelligence. AI can be used for surveillance pricing as a way to comb through large amounts of data to set a given price. Lindsay Owens, president and CEO of Groundwork Collaborative and author of the book Gouged: The End of a Fair Price—and What That Means for Your Wallet, told Gizmodo in a statement Wednesday that she supports the FTC’s inquiries. “American consumers should be able to book a flight, order a ride, or walk into their local grocery store and know that the price they see is the same price their neighbor sees. But corporations are increasingly deploying sophisticated technology to instead make sure the price you see is the most you, personally, are willing to pay,” said Owens. In an interview for the release of her book last month, Owens told Gizmodo about many of the ways that companies have experimented with surveillance pricing and stressed that it seems to be a bipartisan issue. She was a witness for Republican senator Josh Hawley of Missouri during testimony to the Judiciary Committee. “The airlines, rideshare and delivery apps, and retailers the FTC has ordered to open their books are at the forefront of spying on shoppers and turning their data against them. Some of them have insisted to customers that they price products, not people. If that’s true, they should have no issue complying with the FTC’s order and giving American consumers a peek into their pricing black boxes.” Owens has also noted that companies like Walmart hold patents on surveillance pricing tech, but Walmart has denied that it has any desire to use that tech. One patent specifically targets how digital shelf labels might be used to change the price for a given consumer. As Owens emphasized, “the example they give is tuna and mayonnaise. Once you have the tuna, they can change the price of mayonnaise.” Gizmodo reached out to all nine companies and received statements from Delta and Instacart. Target directed us to a fact sheet posted online earlier this month. Delta responds “There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized offers based on personal data,” a spokesperson for the airline said. “We have zero tolerance for discriminatory or predatory pricing and fully comply with applicable privacy, pricing, and advertising laws.” Instacart responds “Instacart does not and will not engage in surveillance pricing,” a spokesperson for Instacart said. “We do not use personal information to set prices, and we never will. We appreciate the FTC’s focus on this practice, we are committed to transparency and improving affordability for customers, and we will continue engaging with policymakers and regulators to ensure they understand how pricing on our platform works.” Gizmodo will update this article if we hear back from the other companies.