The House Committee on Oversight and Government Reform is stepping up its scrutiny of what lawmakers call “surveillance pricing,” a practice where companies use artificial intelligence to analyze detailed consumer data and then charge higher prices to shoppers deemed willing to pay more. Chairman James Comer (R‑KY) wrote to the Federal Trade Commission on Wednesday requesting a staff‑level briefing about the agency’s recently proposed rule aimed at curbing these deceptive pricing tactics.
What is surveillance pricing?
According to the committee’s findings, major retailers and service providers—including Amazon, Walmart, Lyft and Target—collect or purchase extensive behavioral data on shoppers. Using AI tools, they create individual profiles that may contain purchase history, real‑time location, demographics, annual income, relationship status, IP address, browsing history and even cursor movements. The profiles are then used to adjust prices for groceries, airline tickets, hotel rooms, electronics, ride‑share fares, event tickets and other goods and services.
FTC’s proposed rule
The FTC’s draft regulation would require businesses that employ personalized pricing to “clearly and conspicuously disclose not just that the price is personalized, but also the basis for that personalization and the types of data on which the personalization is based.” Failure to provide such disclosure could violate Section 5 of the FTC Act, which prohibits deceptive or unfair practices. The agency argues that consumers who are unaware of personalized pricing cannot take steps to avoid higher charges, effectively being “tricked into forgoing alternative courses of action” and paying more than they otherwise would.
Economic impact
Beyond the consumer‑harm argument, the committee highlighted the scale of data monetization. A 2024 Consumer Reports investigation found that Kroger alone generated $500 million by selling loyalty‑program data to other companies. Industry analysts estimate that major corporations collectively earn hundreds of millions of dollars each year from such data sales.
Committee’s stance
In his letter, Chairman Comer wrote, “The Committee’s examination of these practices has reinforced our concern that consumers are frequently unable to determine whether or how their personal data is being used to determine the price they are charged in store or online. The Committee supports a final policy that reflects a clear, workable, and well‑supported legal framework.” While the FTC cannot ban all forms of personalized pricing, the proposed rule would give the agency authority to crack down on deceptive or unfair implementations.
Industry response
Proponents of data‑driven pricing argue that the practice can enable more targeted loyalty programs and discounts tailored to shopper preferences. However, critics warn that such programs can become deceptive, offering “discounts” that are merely reductions from inflated baseline prices, ultimately harming consumers.
The House Committee’s request for a briefing signals a bipartisan push to ensure that AI‑enabled pricing practices are transparent and fair, protecting shoppers from hidden price hikes while preserving legitimate uses of data that benefit both businesses and consumers.
Original reporting: KTBS 3 (Shreveport) — read the source article.
