At this point, many of us are fairly desensitized to media surveillance. We accept cookies on websites without a second thought, and rarely, if ever, read the fine print on how companies can use our data. In fact, our information is already being sold to companies in order to curate personalized ads based on our search history and website usage. In a media landscape full of data exploitation, it can be easy to lump in personalized pricing as just another way that our information is being sold, one that will not impact our day-to-day lives. However, personalized pricing poses a uniquely serious threat to our online selves.
Customizing prices for consumers was once the norm, particularly during a time when most customer interactions took place face-to-face and business owners could adjust their charges based on the customer’s appearance or bargaining abilities. Obviously, this policy has changed — partially because business owners realized it was more efficient to hire lower-paid workers, many of whom have no expertise in negotiating, to sell items at a fixed price. It is important to note that this change was entirely based on businesses’ interests as opposed to any sort of governmental intervention regarding personalized pricing.
The landscape of personalized pricing has altered. Instead of being determined by individual workers, companies are now using artificial intelligence in order to calculate a price just for you. This price can vary depending on where you’re from, your browsing history and even the type of device you use. While this may seem harmless on the surface — people deemed able to pay more do pay more, and those who clearly can’t enjoy a lower price — it is not that simple. For example, an AI algorithm could identify that a single mom does not have the time to carefully compare prices, and thus assign her a higher price than she would have received if the price were fixed. The use of AI also allows companies to execute this practice at a scale never before seen, and there are no signs of it stopping.
During the last few days of the administration of former President Joe Biden, the Federal Trade Commission prepared to launch a study on personalized pricing, voting 5–0 on the order and issuing it to eight different companies. The order would have allowed the commission to look into the personalized pricing tactics of companies — these being Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture and McKinsey & Co. — with the goal of judging their risk to consumers. However, President Donald Trump’s new FTC chair shoved the order aside days into the new administration. This act falls in line with other legislation that Trump has pushed regarding AI, such as an executive order draft that would ban states from being able to enforce legislation on AI.
There is a reason that Biden’s FTC was primarily focused on transparency and a reason that the Trump administration immediately shut this effort down. AI is still relatively new and confusing for consumers, meaning there is a lot of gray area for companies to engage in more and more exploitative practices without the American people knowing to call them out. In fact, a survey by the Consumers International and the Mozilla Foundation revealed that 97% of Americans are concerned about personalized pricing once they are informed about it.
Trump notoriously ran on a populist campaign, discussing day-to-day issues like inflation in order to win voters. However, his policies, including those on AI regulation, prove time and time again that he does not care about the working man. Trump is funded by major corporations, not working-class Americans, and thus it is their interests that shape his policies. It is through lack of transparency that politicians like Trump are able to maintain their political power, and it is through education that we can defeat them.
Regardless of your opinion on whether personalized pricing could actually benefit low-income consumers, it seems clear that the American people have a right to know companies’ actions in the murky field of AI, and a right to have their government regulate said practices when they might be harming citizens.
