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Surveillance Pricing: A Threat to Consumer Fairness?

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A concerning trend has emerged in the world of consumer pricing: surveillance pricing. What is it? For now, there does not seem to be an agreed-upon definition, but the practice involves businesses using personal data to determine individual prices for goods or services. From online shopping histories to credit scores, businesses are collecting a vast array of information to tailor their pricing strategies toward individual customers. Whatever the definition, the practice raises significant concerns for consumer protection, including:

  •  Discrimination: Surveillance pricing could lead to discriminatory practices as consumers with lower incomes or less creditworthiness may be charged different prices simply because of their personal circumstances.
  •  Reduced Transparency: When businesses use surveillance pricing, it becomes difficult for consumers to understand how prices are determined. This lack of transparency can make it challenging for consumers to make informed decisions about their purchases.
  • Limited Consumer Choice: If businesses can charge different prices to different consumers, it may discourage competition and reduce the availability of affordable options.
  • Privacy Concerns: The collection and use of personal data for pricing purposes raises serious privacy concerns.

The Federal Trade Commission (FTC) has taken notice and has expressed concerns about the practice, focusing on potential anticompetitive and unfair business practices. The FTC’s investigation into surveillance pricing aims to understand the extent of its use, the types of data being collected, and its potential impact on consumers. One thing appears fairly certain: we haven’t yet heard the last on this topic. Follow this space for periodic updates.

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