ST. LOUIS — Most people don’t realize how much of their personal information is collected when they shop online, or even in stores. And now, with artificial intelligence, that data may be used against them in a practice called “surveillance pricing.”
A growing federal investigation is exposing this high-tech strategy where certain companies use your personal data to decide how much you pay.
5 On Your Side spoke with people at a Brentwood shopping center to see how they feel about it.
"I just heard of it just now," said Jesse Gray. “... It’s kind of crazy. It feels like an invasion of privacy.”
"Well, it kind of makes me think a bit of Big Brother," said Terri Shay, another shopper.
But it’s happening online. It’s a controversial practice where AI and personal data, like browsing habits, location, even gender, determine how much you pay.
“So there’s really a risk here," said Stephanie Nguyen, the Federal Trade Commission’s chief technologist.
She’s part of a team probing into how companies might use AI to assign personalized prices.
In July, the FTC ordered eight firms – Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey – to provide information on how third-party firms leverage technology and consumer data to set a different price for different consumers.
We reached out to the companies for reaction.
A Mastercard spokesperson said in an email: “As part of a broader study, the FTC requested information from Mastercard about some of the services and platforms we offer customers to better understand trends and insights related to their businesses. We are cooperating with that request. But, it is important to clarify that we do not provide surveillance pricing services. We design our trends and insights services and platforms to enable our customers to better engage with their customers, including use cases such as targeted discounts and other value-added offers, which, by their very terms, deliver substantial value to consumers. And, we are working with the FTC to share that same understanding.”
“We're seeing a lot of software vendors or consultancies who are starting to offer to help companies implement that data driven pricing," said Nguyen.
Unlike “dynamic pricing,” which adjusts prices based on supply and demand, surveillance pricing could mean you pay more than someone else for the same product.
“And we want to make sure that surveillance pricing isn’t resulting in harm to certain communities or to certain individuals," said Nguyen.
Researchers have been sounding the alarm for years. In 2015, a ProPublica study revealed that a test prep company charged higher prices to Asian Americans based on ZIP codes.
Now, AI could make pricing discrimination even harder to detect.
"We don’t want people to be charged based on their race or their gender," Nguyen said.
So, what can you do? Experts suggest reviewing your app permissions, but let’s face it, most of us don’t have time to dig through the fine print. That’s why the FTC is stepping in.
Their investigation is still ongoing, with no clear timeline, but they’re vowing to hold companies accountable.
A JPMorganChase spokesperson told us in an email:
“The FTC has notified us that they have withdrawn their Order, and no further response from JPMC is required.”