Democrats in Pennsylvania have introduced a bill that would stop retailers from changing the price of essential goods and services in a given 24 hour period. And it\u2019s just the latest push at the state level to fight the rise of so-called surveillance pricing, the practice of rapidly changing prices for different consumers using high tech tools. At least a dozen states are considering legislation this year around the topic.<\/p>\n
Surveillance pricing has long been a thing online, where retailers can easily show different prices to different consumers. Ridesharing companies like Uber, for instance, can charge users more when they have lower battery life<\/a> on their phone. And Instacart was recently caught using AI to experiment with seeing how much consumers would pay for various groceries, with some people paying up to 23% more<\/a> for the same goods.<\/p>\n But consumers at brick and mortar stores have become increasingly concerned about how things like digital price tags and cameras in store could potentially be used to change prices. Retailers can hypothetically use the same tools to charge different prices based on age, race, gender, and past buying history, among a host of other variables. And states are trying to fight back even before things get out of hand in sci-fi dystopian ways.<\/p>\n The proposed legislation in Pennsylvania, Senate Bill 1205<\/a>, would amend the state\u2019s Unfair Trade Practices and Consumer Protection Law to include any rapid changes to prices on essential goods within a 24 hour period. The law would ban changes \u201cbased on demand or other factors, including through the use of artificial intelligence or an artificial intelligence model that retrains or recalibrates based on received information.\u201d<\/p>\n The idea, of course, is that changing prices more than once a day would be unnecessary unless you were utilizing a dynamic or surveillance pricing scheme. On a practical level, such changes can be time and labor intensive, but with electronic price tags, things can change rapidly and even automatically, perhaps according to the whims of AI.<\/p>\n As the Arizona Capitol Times<\/a> notes, there are at least a dozen states currently considering legislation on the topic of dynamic and surveillance pricing, including Arizona, Florida, Hawaii, Illinois, Kentucky, Nebraska, Oklahoma, Pennsylvania, Tennessee, Vermont, Virginia, and Washington. New York became the first state to pass a law around dynamic pricing with the Algorithmic Pricing Disclosure Act, though it just requires disclosure<\/a> when an algorithm is being used with your personal data to set a price.<\/p>\n George Slover, Senior Counsel for Competition Policy at the Center for Democracy and Technology, testified this week about the proposed legislation in Pennsylvania. Slover studies antitrust issues and has a keen interest in algorithmic collusion and what he calls bespoke pricing. The idea of surveillance pricing is new enough that the terms we used to talk about it haven\u2019t really been settled.<\/p>\n Slover told Gizmodo that it seems like it\u2019s almost exclusively Democratic legislators who are currently interested in the topic but there seems to be increased awareness lately that could lead to more widespread action.<\/p>\n \u201cIt\u2019s an issue that people are really getting interested in because the idea is clearly disturbing,\u201d Slover said, \u201c\u2026that the price I\u2019m getting is different than the price that somebody else is getting and that maybe I\u2019m having to pay more.\u201d<\/p>\n \u201cThe creepiest one is the surveillance pricing or the bespoke pricing. But the dynamic pricing [\u2026] the algorithmically fed price changes, is also disturbing to people when they hear about it.\u201d<\/p>\n One of the problems consumer rights advocates encounter is the fact that the surveillance and dynamic pricing practices are opaque, as former FTC chair Lina Khan explained in a video last year. <\/a>So in most parts of the country we wouldn\u2019t necessarily know if a retailer was already using various algorithmic methods to set prices using personal data.<\/p>\n Retailers know there\u2019s skepticism out there. Walmart has been rolling out digital shelf labels (DSLs), with 2,300 Walmart stores<\/a> already sporting the electronic markers, according to the company. The retail giant says it expects every location to have digital shelf labels by the end of this year. And they\u2019re being sold as a way to simply make things more efficient.<\/p>\n