Loading summary
Transcript153 lines
- [00:03]
A
From Recorded Future News and prx, this is Click here. Hey there, it's Dena. A quick note before we start. Twice a month, we team up with our friends over at the One A news magazine for something we call Cyber Monday. And this time, we focused on the way pricing is changing. Because in New York, lawmakers are trying to require something you might not think twice about, using physical price tags so everyone sees and pays the same thing. Another bill would block businesses from changing the price on something based on your personal data. This practice has a name, surveillance, pricing, and assembly member Emerita Torres, we'll hear from her later in the show, has focused on it like a laser beam. But this isn't about labels on a shelf. This is about how technology is starting to shape what we pay and what we're shown. And it's shifting the balance of power away from consumers and toward companies that may know us even better than we know ourselves. As part of our regular Cyber Monday series, we're taking a closer look. And the first voice you'll hear is from 1A's host, Jen White.
- [01:26]
B
Dina, welcome back.
- [01:27]
C
Thank you very much.
- [01:28]
B
So we've been talking about data and how it's used for decades now, how we're tracked, how we're profiled. Why is it important that we pay attention to this subject right now?
- [01:38]
C
What's really changed is the scale and the tools. For a really long time, data mostly fueled the targeted ads we saw on our computers or on our phones, which were annoying, but they weren't life altering. Now AI is giving companies the power to take these same mountains of data and actually make pretty accurate predictions about us. And that's a huge, huge escalation. It's moved from just showing us things to actually deciding things for us. And that shift changes the balance of power between companies and consumers in ways I think most people don't fully understand yet.
- [02:11]
B
When we talk about our data, that can feel like an abstract concept. It's just this. It's this thing. It's floating in a cloud somewhere. But what does that look like in our everyday lives? What kind of information is being collected about us?
- [02:23]
C
Think about it in terms of shopping, in terms of travel, even housing. Behind the scenes, companies are making, making these calculations in real time about who we are, what we want, and most critically, what they believe we'll pay. One of the experts we talked to said they want to find out what we're willing to pay and get us
- [02:42]
A
to pay it and not a penny less.
- [02:45]
B
That's.
- [02:46]
C
Isn't that amazing? That's like the holy grail for companies, is to find exactly the price, but
- [02:53]
A
not a penny less.
- [02:54]
B
We ask consumers, especially if you shop in brick and mortar shops, right? You're used to seeing a price knowing that's how much it costs. And so if we subscribe to a streaming service, and we probably expect to pay the same subscription fee as everyone else. But what I'm hearing is that in 2025, that assumption may not hold up.
- [03:13]
C
It doesn't hold up anymore. I mean, you have gotten little bites of this when you go and try and buy an airline ticket, right? You buy it way in advance. Maybe you don't get a great price because it's way in advance, because you're planning for a wedding or something like that. Sometimes if you buy a ticket just three or four days beforehand, it'll be cheaper than if you bought it 30 days before. But if it's 24 hours before they figure, oh, they're desperate to get this ticket, let's charge them top price.
- [03:40]
B
We got this from a member of the One, A text club who writes, I see this with airline tickets. I always choose no to optional cookies, and I delete my browsing history when I'm ready to buy my tickets before returning to the site I've chosen to buy them on. So someone trying to find some workarounds when it comes to surveillance pricing. Dina, who wins and who loses?
- [04:00]
C
Well, the companies call it personal pricing as opposed to surveillance pricing. And they claim that they actually want to give us some kind of discount. That's the reason why they're getting all this information about us. But companies are not in the business of giving discounts. Companies are in the business of trying to make a profit. So the people who really lose are us, particularly if we don't realize that's going on. I mean, it depends what time of day, for example, that you're going to
- [04:28]
A
buy something that could change your price.
- [04:31]
C
It depends where you actually are located. You could be out in a parking lot of a Target, having already gone in, and then you walk out to the parking lot and the price of the thing that maybe you were browsing $100 cheaper. It'll happen right before your eyes to
- [04:44]
B
maybe try to incentivize you to go
- [04:46]
C
in, don't leave, come back and buy.
- [04:48]
B
Which groups of people are companies likely to target with this strategy?
- [04:53]
C
Oh, I think it's everyone. I don't think it's particular groups of people. But then the targeting gets a little bit more finite. You. So, for example, there was A case that the FTC brought against Tinder. They were charging higher prices to older people who were signing up to try and find a mate under the assumption that if you're older, maybe you're a little more desperate to find the perfect someone, so therefore they'll charge you more. Princeton Review, for example, was accused by the FTC of actually charging more for Princeton Review. Remember SATs, BSATs? They were charging more in Asian neighborhoods for the same classes. Now, Princeton Review denied they were doing this, but it was certainly something that the FTC was investigating.
- [05:37]
B
What does this mean for the sense of trust people have in the economy
- [05:45]
C
or even the price you're seeing before your eyes? It could be different. You could try this test at home, look for a product online on your computer, and then look for it on your phone, and you'll probably get two different prices. And the problem with this is it's kind of the eroding trust that you wonder, maybe Jen is paying more for something than I am. Maybe I'm paying more than Jen for diapers or whatever it is. And because of that, because it seems inherently unfair and somewhat arbitrary, it's actually not arbitrary. It's based on your data. You start to wonder whether the price
- [06:20]
A
you're paying is fair.
- [06:21]
C
And it erodes the trust just in that relationship between consumer and store.
- [06:26]
B
A member of the text club writes on my Walmart plus app, I scanned a box of Glad Cling Wrap to add it to the list and was shown a price of $12.99, which is ridiculous. I Googled the product and saw Walmart and Target sell it for under $4. I'm almost ready to go back to shopping in brick and mortar stores myself. For many of us, Dina, when it comes to our data, we've gotten to this place where convenience outweighs our unease. Groceries can be delivered in under an hour. We can call a car to our front door in minutes. We up a date with a swipe. But what's the trade off between that convenience and how our personal information is used?
- [07:06]
C
I think we didn't think about it much before. I think that we clicked on cookies or we used Amazon, and we just assumed that this convenience was in and of itself, maybe a slight price increase, but it was worth it. And the problem is that they've gathered all this data for so long, and it's not just about targeted ads now. It's literally trying to figure out how much you're willing to pay. And obviously, obviously, somebody, one of the people who text, weren't willing to pay $12.99 for cling wrap. I'm with her on that. But they're trying to figure out just how desperate you might be. For example, if you have a kid, let's say you look up online symptoms for some kind of disease, that your kid has some chickenpox, right? So you need to get medicine for your kids. So you go to the pharmacy or you go to the drugstore to get whatever minimal medicine that is the.
- [07:57]
A
They know that search history.
- [07:59]
C
So all of a sudden the cough medicine or whatever it is you need is a little bit more expensive.
- [08:05]
B
Well, you spoke with Sam Levine, who used to work at the Federal Trade Commission. He ran the FTC's Bureau of Consumer Protection, which, as you said, they investigated this. And he talked about the different tools companies have explored to track customers. And it's not just location, it's also electronic shelf labels, even facial recognition. And here's some of what he said.
- [08:24]
D
A number of major grocery chains, including Kroger and Walmart and others have talked about using digital shelf labels. I think Walmart's made big plans to implement these labels. Some grocery chains have also talked about partnering with facial recognition companies so they know which consumers are going through their aisles. And here again, we could live in a world where a consumer is shopping online for a recipe the grocery store knows, because maybe that consumer has the grocery store app knows they need some certain products, knows there aren't competitors in the area that sell that same product and gouge that consumer.
- [09:05]
B
What protections are in place right now to ensure that this technology isn't abused?
- [09:12]
A
Almost none, is the sad answer to this.
- [09:15]
C
The FTC had been doing some work on this particular. They had done a big report on surveillance pricing and they'd put, put the report out for public comment. Most of the, I think all of the Democrats from the FTC have been taken off the FTC consumer protection board. Now Andrew Ferguson is in charge of the FTC and he has closed the public comments on the pricing surveillance report, which at least indicates that this is not a big priority for the current administration. So the ability to actually fight this with teeth is very difficult. I mean, what you end up having to do is be extra vigilant about the way that you're buying ordinary things, the same way you do airline tickets. I mean, they're a big ticket item, but you check around right now you're going to have to do this for the most basic things until someone or some agency steps in and says, enough. You can't use the information this way.
- [10:13]
B
Another member of the tax club writes, I'm in the IT industry. Algorithms continually update prices. They take many factors into account, like the zip code you're buying from, the type of credit card on file, frequency of purchases, age, and even more. Even if you don't provide it to them, they can get it. Dina, how much concern is there that basically companies are laying the groundwork for techniques they might use in the future to continue pricing things specifically for individual customers?
- [10:42]
C
Well, it's all a normalization process, right? So in the beginning, when they had some of our data brokers, had our information, and we got the targeted ads, we found those sort of annoying. Maybe more than annoying, we found them a little creepy. We were looking at shoes and all of a sudden shoes keep popping up on our screen. Well, this is that on steroids. And there's not a lot we can do about it right now except, you know, clear the cache of cookies, shop around, walk out of the Target store. If you're going to buy a big ticket item and look at it on your app and see whether or not the price went down, it might be
- [11:17]
A
an instant sale just for you.
- [11:22]
B
Coming up, we hear more of Click here's reporting about how surveillance pricing could affect you and we want to hear your story. Have you ever noticed a price that seemed to change without explanation? Maybe in an app, a store, or even in your rent? Email us@1aamu.org we'll be right back.
- [11:45]
A
This show was supported by Human Rights Watch. There are more displaced people in the world than at any time since World War II. The great unrooting is a limited series that tells this epic story through the eyes of a young man from Myanmar. Where do you go when you have to flee? What do you take with you? What if they don't want you when you get there? It's a story of flight and survival, of climate change and social media, of borders and passports and hope. The Great Unrooting from Human Rights Watch. Wherever you get your podcasts, this show
- [12:22]
E
is supported by Blueland. We hear a lot about microplastics in oceans and food, but they can also come from products we use every day at home, including cleaning products. Blueland is on a mission to make it easy for everyone to make sustainable choices. Blueland believes that hardworking, clean products can be the norm, not the exception, so that you can do better for your family and the planet at the same time. From cleaning sprays and toilet bowl cleaner to dishwasher and laundry detergent tablets, Blueland's products are independently tested to perform alongside major brands and the formulas are free from dyes, parabens and harsh chemicals. You'll love not having to choose between the safe option and what actually gets your house clean. Blueland is a certified B Corp and Leaping Bunny Cruelty Free Certified. Their formulas are EPA Safer Choice certified and many products have also earned Cradle to Cradle's Gold Material Health Certificate. If you're looking to make a small change in your routine, you can get 15% off your first order@blueland.com PRX get 15% off your first order by going to blueland.com PRX blueland.com PRX
- [13:31]
A
you're listening to click here.
- [13:33]
C
I'm Dina Temple roster
- [13:37]
B
this is 1A. I'm Jen White. We're talking about how companies track our data to personalize prices for us when we shop online. Some call it surveillance pricing. It's the subject of a recent episode of Click Here, the weekly cyber and tech news podcast from Recorded Future News. Host and managing editor Dena Temple Rastin digs into the tech driving surveillance pricing and looks at efforts to protect consumers
- [14:03]
A
in the South Bronx, life still moves to a rhythm all its own. Bodegas on every corner, mornings that begin with sidewalk hellos and the news there. The real news still travels by word of mouth. That's how Emerita Torres first heard about this crazy thing.
- [14:22]
F
I'm the assembly member from the 85th district in the state of New York, representing the South Bronx, and recently she
- [14:30]
A
heard a story from a constituent that
- [14:32]
C
stuck with her a man from her
- [14:34]
A
district who had been out shopping with a friend. They pulled out their phones to double check the price on a product they both wanted, and they were shocked.
- [14:42]
F
And they were sitting together on phones searching for the same product. And he was being charged a different price at a clothing retailer from his friend.
- [14:53]
A
Why would two people shopping for the exact same thing be charged different prices? It sounded like a glitch, but then Emerita noticed something similar in her own life.
- [15:05]
F
I have two children under three years old that still use diapers. I've noticed differences in the cost of diapers, depending on when I order them, depending on if I order them through my iPhone versus ordering them on a desktop. My partner's ordered diapers and sometimes they're different prices for him.
- [15:25]
A
All of a sudden, buying clothes or diapers, products with historically pretty consistent prices started to feel like buying a plane ticket, where the prices change moment to moment and get worse when you get more desperate.
- [15:39]
D
Everyone knows that you can't just go to an airline website and See a list of prices. So whenever I'm booking an airline ticket, I'm trying to optimize what time of day should I book it, what browser should I use, how often should I check that price.
- [15:56]
A
Sam Levine used to work at the Federal Trade Commission. That's the government agency that looks for scams and corporate overreach. These days, he's the commissioner of New York City's Department of Consumer and Worker Protection.
- [16:10]
D
That kind of gamesmanship where you feel like you constantly have to outgun the system. When I go and buy airline tickets, I feel like I'm going into battle. And that's because airlines are the early innovators in surveillance pricing.
- [16:28]
A
Emerita wasn't imagining random fluctuations. They weren't random at all. And she was also seeing into the future, a future in which you're being gamed every time you buy anything from apples to diapers to a pack of gum. Companies call it personalized pricing, the cost of something tailored to you. But it also has a more menacing name. Critics like Sam call it surveillance pricing,
- [16:58]
D
using personal data and behavioral tracking to set individual prices to individual people. Instead of having one product, one price, we're in a world of one person,
- [17:09]
A
one price, and it's a fundamentally different power balance. Right now, consumers have at least some power to bring prices down. If a price is too high, you can comparison shop and hopefully buy it cheaper elsewhere. If enough consumers do that, companies have to lower the price. But if that price tag follows you anywhere, you shop for the item, when
- [17:33]
D
we're suddenly in a world where the price you're being offered is a price individually tailored to you, it's going to make life more expensive.
- [17:42]
A
We've been giving away our personal data for years now, sometimes with our consent, sometimes without. And for a long time, the stakes seemed low. Most of that data just fueled targeted ads. Annoying, maybe, but easy enough to ignore. But now AI has supercharged those data troves, and suddenly they're not just tracking what you buy, but they're deciding what you pay.
- [18:08]
D
So if companies have really granular information on how much a consumer is willing to pay, they're going to see much higher profits, we're going to see much higher prices, and it's going to especially hit the people who are most desperate.
- [18:23]
A
Sam Levine spent nearly a decade at the ftc, and over his time there, he and his team started to feel edgy about data brokers and all the power they seem to wield.
- [18:34]
D
They're these shadowy companies probably your listeners have never heard of, but they have Heard of your listeners. They have dossiers on all of your listeners based on data they collect.
- [18:46]
A
They got concerned about how invasive data brokers were getting, concerns we all have. But the FTC could actually do something about it. So they did. They sued some of the country's biggest data brokers, and they found that they were misleading people, even gathering their data without consent. And then it took an even more unsettling turn.
- [19:08]
D
And what we started to see as we dug more closely into it, is that while this data was currently being used primarily to target advertiser, companies were increasingly exploring using it to target prices.
- [19:21]
A
Targeted ads suddenly felt benign. So the FTC subpoenaed a small sample of these pricing firms, just eight of them. They call themselves price optimizers.
- [19:32]
D
They use different terms, but it's a bit of a euphemism for, we're going to show you how to get away with raising your prices.
- [19:40]
C
What was the most jaw slacking thing that you discovered something you didn't know that you were surprised about?
- [19:46]
D
How many companies were already exploring or using AI pricing, surveillance pricing? We found that just these eight firms had more than 250 clients from a broad range of industries.
- [20:01]
A
Grocery chains, discount stores, beauty retailers, everyone from Amazon to Ticketmaster to Walmart. Pricing not so much person by person, but by a certain category of person, like raising prices for anyone above a certain age. Tinder was sued for charging older users more for the premium option, perhaps on the assumption that they'd be more desperate to find a match, though Tinder denied that they were doing that.
- [20:30]
D
What that does, it takes sort of all of the biases that we already know exist in the dating market, replicating those biases digitally and then using them to overcharge people who are the most desperate to find mates.
- [20:44]
A
Companies are starting to get more granular, not just targeting whole categories of people, but individuals in a very personal way, based on things like where you happen to be at some precise moment in time.
- [20:59]
D
We're talking, I'm at a specific pharmacy, I'm in a specific parking lot. You're at a specific intersection, you're driving a particular speed.
- [21:11]
A
And if you're still thinking, come on, companies wouldn't actually do this. Consider what happened at Target.
- [21:17]
C
Target's app changes the prices on certain items depending on whether you're in the store or outside.
- [21:24]
A
One shopper saw it for herself in store. She bought something for $100. But when she left the store, my
- [21:32]
G
app was still open and it was still on that product. And when I got to my car I noticed it said $69.99.
- [21:39]
A
A local news station decided to see if it was a fluke. They went into the local Target, opened Target's app, and added things to their virtual cart. Then they walked outside and watched the precise moment that the prices shifted once they were in the parking lot.
- [21:55]
B
And if you pay close attention to
- [21:56]
H
the $351.99 there on the app, you'll see boom.
- [22:00]
D
Like a magic trick, it changes.
- [22:02]
B
Hundreds of feet away from the store,
- [22:05]
A
at the far end of the parking lot, the same products were nearly $250 less. The San Diego County District Attorney's office filed a lawsuit and Target settled, refunding millions of dollars back to consumers.
- [22:22]
D
Location information is one of the most powerful sources of data that companies can use to set prices. And when companies know, for example, that you're in a location where there's not a lot of competition, they can charge you more.
- [22:37]
A
Even worse, big ticket items seem to be getting into the game, too. Landlords have been accused of surveillance pricing.
- [22:44]
C
Tonight, the Justice Department expanding a lawsuit against RealPage, accusing the company of using
- [22:50]
A
tenant data to coordinate rent increases across the country. Of course, data brokers have been tracking us for years now. So why is this just emerging? Well, in some ways, there's just too much data. Companies didn't have enough computing power to process it. But that isn't true anymore for a very simple reason.
- [23:12]
D
AI is what's powering surveillance pricing. And what AI can do is be incredibly powerful in making predictions about consumers willingness to pay.
- [23:22]
A
We have very few restrictions on what companies can collect and how they use that data, so they can build vast dossiers on every individual consumer. And there are people you want to have that kind of insight into. You, your partner, your best friend, your therapist. They use what they know to help you spot patterns or understand yourself a little better. But algorithms hand you tissues or offer advice. They take what they know and they turn it into leverage.
- [23:54]
D
When companies are fighting restrictions on surveillance pricing, they'll say, oh, we just use surveillance pricing to give discounts. The reality is, the holy grail for companies is charging consumers exactly what they're willing to pay and not a penny less. And that's not some wild conspiracy theory. That's capitalism. Companies are in the business of maximizing profits, not maximizing discounts. So if companies have really granular information on how much a consumer is willing to pay, that's how much they're going to charge.
- [24:30]
A
By now, you might be wondering if companies are quietly using our data to Squeeze more out of us. Isn't someone supposed to stop them? There is, or at least there was.
- [24:42]
D
My sense is that this is the wholesale decimation of consumer protection across the federal government.
- [24:48]
A
The Federal Trade Commission, created back in 1914, was built for exactly protecting consumers, not just writing reports or issuing stern warnings, but taking on companies directly. The FTC has used that power to look into whatever issue was plaguing the country at the time.
- [25:08]
D
100 years ago, the FTC used this authority to really lift the hood on the meatpacking industry. In more recent years, under my tenure at the ftc, we issued a major study on social media platforms and how they were mishandling children's data.
- [25:24]
A
They found that social media companies were collecting and keeping kids data and then selling ads against it, sometimes even after parents asked them to stop. So the FTC took them to task. They've responded with regulations and binds. They went after TikTok, GoodRx, Epic Games over consumer privacy protections. And they stepped in again.
- [25:46]
C
When people started complaining about how hard
- [25:48]
A
it was to cancel subscriptions with companies like Amazon and Adobe.
- [25:53]
D
Consumers were complaining they were getting trapped, unable to cancel.
- [25:57]
A
The result, a new FTC rule, click to cancel. If it's that easy to sign up, it should be just as easy to get out. And then came the report on surveillance pricing. But instead of acting on the report, the Republican commissioners came out against it. They wrote a dissent and said the process was rushed. And then in January 2025, one of those dissenters was appointed to lead the agency, Andrew Ferguson. And one of the first things he did with his new power was turn off the public comment section on that surveillance pricing report. It appears they're not looking at the issue anymore. And this is happening elsewhere, too. Trump fired the Democratic commissioners of the Consumer Product Safety Commission, the people responsible for making sure your kids toys don't explode or that your phone charger doesn't catch fire. And the Consumer Financial Protection Bureau, the agency created after the 2008 financial crisis to prevent a future one. Same story. It's been all but shut down. Even the click to cancel rule blocked in court. And instead of regulating AI, Trump has tried to insert a provision in his recent spending bill that would have prohibited states from regulating it. What's Trump's FTC doing instead? It's weighing in on what used to be fringe culture war issues. Things like running workshops on the dangers of gender affirming care. They also went after social media sites pointing to what happened after Elon Musk bought X. And there was this Large uptick in hate speech and violent content. Advertisers fled the platform to avoid associating their brands with that content. And Republicans said the brands were trying to silence conservative content. So when the world's largest advertising companies
- [27:55]
I
wanted to merge, in an unprecedented move, the FTC forced both companies to agree that they will not discriminate against clients based on political or ideological beliefs.
- [28:09]
A
It essentially forbade them from boycotting platforms like X, formerly known as Twitter, even if they hosted hate speech or disinformation. So the chance of the federal government stepping up to stop surveillance pricing, they seem to be shrinking by the day. So what now? It's falling to the states and consumers to pressure companies. In fact, Amarita Torres is trying to do just that. Remember the New York assembly member who noticed diapers cost more depending on the device she used to. She read that FTC report, and she didn't wait. She introduced a bill that requires companies
- [28:52]
F
to disclose when a price was set via an algorithm using your personal data.
- [29:00]
A
Not surprisingly, industry groups weren't thrilled. But she kept pushing.
- [29:05]
F
At least now we'll know that our prices are being set by an algorithm. And, of course, consumers will wonder, what
- [29:12]
A
does that mean, in a way, restoring the power that personalized pricing takes away from consumers. If enough consumers see this, she hopes, they'll be so alarmed, they'll push back. Other states are looking at following suit, but for now, New York is the only state with an algorithmic pricing law.
- [29:31]
C
It's actually in effect today. The day we're talking, right?
- [29:34]
E
Mm.
- [29:34]
B
Today's the day.
- [29:36]
A
From now on, New Yorkers will see a quiet notice in their digital shopping carts. But Sam says transparency isn't the same as protection after all. We've heard this logic before. It's the same thing the government said about Internet privacy. Just read the terms and conditions.
- [29:53]
D
That was a fantasy. It was a fiction. I think everyone would now agree it was a huge failure. What we've seen over the last couple decades is that companies will experiment what they can get away with. Once they realize they can get away with something, we see their competitors matching it, and suddenly it becomes widespread.
- [30:14]
A
We're repeating history. But this time, the price isn't just your privacy. It's your groceries, your medicine, your rent. And increasingly, you don't get to choose. Because when the price is set just for you, there's no way to know if you're getting a deal or just being taken. That's why Amerita's law matters. It's not just about forcing companies to say what they're doing. It's about making the invisible, well, visible. Because what companies are doing isn't illegal, at least not yet. But that doesn't mean it's fair. The thing about algorithms is they don't have to be malicious, just efficient. And if that efficiency is designed to find your breaking point, well, that breaking point just became your price.
- [31:09]
B
That's Dena Temple Rastin, host and managing editor of the Click Here podcast from Recorded Future News. Coming up, what can you do to make sure you get a fair and uncustomized price when shopping online? That's just ahead. This is one a
- [31:26]
A
foreign.
- [31:32]
I
Mike Pesca, host of the gist, the longest running podcast on news and analysis in the business. Every day I do, I think, a fascinating interview. But I also do a spiel where I will challenge you because I hate listening to podcasts that just agree with each other and only agree with me. So I'm going to say 25% of the time you'll say, mike, I think you're wrong. And 75% of the time you'll say, great point. Well said. Now those numbers might be reversed for some people. They probably shouldn't. Listen, check out the gist. Every single day for a decade now.
- [32:03]
D
It is called Internet.
- [32:04]
C
I use the World Wide Web information superhighway.
- [32:08]
A
Cybersecurity. Why do things go viral quick here. Hey there, it's Dena again. And you're listening to one of our regular Cyber Mondays with WAMU's Jen White. We'll get back to the show. The next voice you'll hear is Jen's.
- [32:24]
B
This is 1A. Let's get back to surveillance pricing, how companies are using our data to customize prices for goods online. Joining us now is Representative Greg Cassar. He's a Democrat from Texas, 35th congressional district. Congressman, thanks for joining us.
- [32:39]
G
Thank you so much for having me to cover this really important topic.
- [32:43]
B
Also with us is Jay Zagorski. He's an economist and a professor at the Boston University Questrom School of Business. He's also the author of the Power of Cash. Jay, welcome to the program.
- [32:53]
H
Great to be on the show.
- [32:54]
B
Congressman, I want to start with you. In July, you introduced the Stop AI Price Gouging and Wage Fixing Act. As its name suggests, it's aimed at curtailing the practice of surveillance pricing. When did you first become aware of this issue?
- [33:08]
G
I started reading about this issue, but then also starting to just hear from friends who had Googled something and then suddenly they were hearing like feeling higher prices. I mean, big corporations, we know are sucking up huge amounts of our personal data. When you're on the Internet, what you Google, where you live, where you move your mouse. But this idea just started becoming horrifying to me that they could use AI to find your pain price point and increase prices when you really need something or pay you less when you really need the work. And I was surprised to find that there was no bill in Congress to ban this kind of corporate behavior.
- [33:52]
B
Congressman, is it something you've experienced yourself? Have you seen something online, price one way, maybe moved computers or used someone else's profile and seen the price change?
- [34:02]
G
Well, look, just like everybody else, you know, sometimes I've looked at buying something online and then I start seeing it everywhere and it feels like the Internet knows more about me than I feel comfortable with. But I don't know. And I think many of the people listening at home may not know if you're getting charged more right now based on algorithms and use of your personal data. I think there's millions of Americans, including me and you, who are probably already getting paid less or having to pay more in prices based on your personal data. And we have no idea. That's part of why we need to act to ensure some transparency. But frankly, as was heard in the earlier segment here, transparency isn't enough. We just need to outright ban this surveillance price gouging now before it spreads like wildfire and becomes the norm in our economy.
- [34:55]
B
Another member of the one A text club writes, my husband and I will remove our phones from wi Fi and check airline and concert tickets at the same time on our computers to see if there is a difference. Ticketmaster and Delta Air Lines absolutely provide different prices at the same time. Ajay, you recently wrote a piece for the conversation featured by our friends at pbs and it's about how customized pricing is the. You call it holy grail for companies. Why is this something so many industries are interested in right now?
- [35:24]
H
Well, the goal is boosting profits. And with customized pricing, free spending, people pay high prices. And the price sensitive, they pay a little bit less. And it's just like clothes being tailored. We can tailor prices to you once AI has enough data. And my point is very simple. Customized pricing is something most of us don't want. So the whole goal is not providing data to AI. The less data you provide to the AI program, the less effective AI is at coming up with a price for you that fits exactly your profile.
- [35:57]
B
Well, we got this question from Mimi, who asks, will browsing in incognito mode bypass this kind of price? Tracking. What can you tell us? Jay?
- [36:07]
H
I do use incognito mode all the time, and I experience this even in incognito mode. In particular, I was in Africa and I needed to fly to a place and I looked up airplane tickets were $250 a piece for my wife and myself. And then my wife said, quick, we need to go to dinner. I came back after dinner. I logged in using a vpn. It said I was no longer in Africa because I was a new vpn. I was back at Boston University, and the price went to $1,000 per person for the tickets. I dropped the VT end, cleared the cash, and it went down to $250 again. So even without knowing who I was, just knowing my location, they provided two dramatically different prices. So it's not just what's in your cash, it's where you are, the type of operating system you're running. All kind of information can be gleaned about who you are and what type of price to give you, even if we don't know your name or who exactly you are on the Internet.
- [37:02]
B
Representative Kazar, how does your bill aim to curtail this practice?
- [37:08]
G
We know that people being squeezed by big corporations is one of the biggest problems we face today in America. And this is the 21st century way to squeeze you for more and more money. So my bill just outright bans the practice of using your personalized data and AI to set you a personalized price. We should not have big corporations be able to charge you more just based on essentially spying on you. And while using incognito mode or a high quality VPN is good, I don't think your parents or grandparents should have to learn what a VPN is in order to avoid getting ripped off.
- [37:52]
B
How does your bill, though, force companies to make the distinction between tracking people's data and using it for a personalized shopping experience? Right. So, yeah, you looked at shoes here. So now we're gonna get you to look at a bunch of shoes and actually changing the prices of items.
- [38:12]
G
Well, look, this is about updating our consumer protection laws to meet the problems of the 21st century. In many states and in this country, we already have laws that protect whole communities from price gouging when a hurricane hits. Right. Famously, gas stations cannot start raising the price of gas when a hurricane hits and they can't charge a whole community more. But now companies can target you when a disaster hits. Your personal life. Think of an airline jacking up ticket prices on you because they know you're going to have to travel for a funeral because you've been googling an obituary. As this technology is changing, our laws need to keep up. So my bill just outright bans using the FTC and other federal agencies that were formed 100 years ago that I know you're covering here on this program updates our laws to say it's not only illegal to price gouge an entire community when a hurricane hits, it's also illegal to price gouge individuals by spying on them. So you can't set individualized prices for individualized people based on the data you've collected from them.
- [39:20]
B
Well, Congressman, you're serving in a Republican majority house. The Trump administration is also rolling back Americans digital protections. It's formed cozy relationships with the tech industry. What's the realistic outlook for a bill like yours right now?
- [39:35]
G
This is the kind of bill that I know has enormous support from conservative to progressive voters. So we've built a really big bipartisan coalition of Americans who believe that big tech companies should not be squeezing you for every last dollar and cent. And that's the way that I hope that we eventually get Republican officials to support it if they eventually have to start listening to their constituents. Because banning this kind of price gouging by big tech corporations is something that I know has broad appeal amongst voters in places like Texas. The lobbyists may not be for it, but when it comes to a fight between the voters and the lobbyists, then I think we should pick the side of the voters every time.
- [40:16]
B
We got this email from Sarah who says, how do you get AI to stop tracking you, Jay? Is that even possible in the current environment if you're going to use a smartphone or a computer?
- [40:27]
H
I don't think it's possible in the current environment. And while I wish the Congressman well with the bill, the question is what can we do now before the bill is enacted? Because bills sometimes take a long time to wind their way from being proposed all the way to being enacted into becoming effective in society. And one of the ways to tell Sarah is use paper money for many of your transactions by using cash. It's very hard to tie you in that cash transaction as long as you don't say, log into a system and tell them your name or things like that. By using paper money, good old fashioned cash, you're providing some privacy protection and preventing AI from getting additional data on who you are.
- [41:09]
B
We also got this question from Roberta who says, is anybody thinking about surveillance, pricing, compromise data and foreign governments? Congressman, I'll come to you on that as you're having these conversations with your colleagues. Are there any broader concerns about how our data is being used, not just by corporations, but by foreign governments?
- [41:29]
G
I mean, we need more strong data privacy laws in this country, period. And this is something that the big tech lobby has been fighting against heavily. I mean, I agree and believe that the problem isn't just surveillance pricing. It's just how available our data is and how little, say, we have over who can collect our data. Because once a big corporation has tons of our data and data brokers actually have data across multiple corporations, that becomes very vulnerable for foreign governments or other actors that might want to abuse that data to suck it up. So I think we need stronger data protection laws as a whole. And then we also need to make sure that the data that does get sucked up doesn't get used against us. Because as the professor pointed out, there's only so many things people individually can do and even an individual corporation can do. Because as soon as one corporation starts using something like surveillance pricing or setting your wages using AI, then pretty soon there's competitive pressure on all of the other corporations in that industry to start matching those practices, whether they agree with them or not.
- [42:40]
B
Mark emails I am ashamed to say that I was an engineer on the development of smartphone technology in the late 90s through the early 2000s. At that time, the pitch was that cell phone companies would be making so much money off of customer data that they could offer phones an unlimited service for free. JAY Even from the early conception of the role smartphones might play in our lives, there was an acknowledgement of the value of our data. So if we don't put guardrails in place on this practice now, considering the rapid development of technologies like facial recognition, how far do you think this could go?
- [43:20]
H
150 years ago, the idea of set single prices for objects was very foreign. Everything was negotiated. And I think we're moving back with AI to this day of everything being negotiated except it's an AI bot instead of somebody on the other side of the transaction trying to size you up. And there's a number of ways of trying to defeat this. One of the ways I talked about a few minutes ago was using cash, other ways of using VPN and things like that. But the best way beyond using cash is to basically show that you're not desperate for a product. And how do you show you're not desperate for a product, to an AI or to a bot or something? Watching you don't click immediately set everything up and then wait, wait five minutes before you hit buy, wait 10 minutes. It's the same kind of thing when you walk into a car dealership and the car dealer gives you a price and you say, I don't think so, and you stand up to walk away. You're telling them, well, you're much too high. Telling an artificial intelligence program that's watching how fast you click on buy tells you whether you're desperate or not.
- [44:23]
B
Congressman, I'm curious to hear from you. I mean, what Jay is describing is an additional level of vigilance among consumers really trying to outsmart an AI bot so that we can get the most competitive pricing. And I wonder, as an elected official, what you think this means for the trust Americans have in our economic system.
- [44:48]
G
I mean, the professor, I appreciate deeply his advice, but that just sounds exhausting, right? Americans already are working their jobs trying to take care of their kids and that you have to think about how long you wait before you click on something or how to set up your VPN before you go and online shop. Things don't have to be this way. And so I know our government and our Congress moves far too slow, but we have to demand more in the age of AI rapidly developing to stop these big tech companies from ruining even more things. I mean, I remember I'm, you know, I'm only 36 years old, but I remember when the Internet used to feel fun where you got to learn new things. You weren't just drowned in ads and having your data sucked up. We can get back to that kind of an Internet if we're just willing to stand up to big tech and put on some guardrails. But we're headed in the wrong direction right now with companies like Delta Airlines recently announcing they plan to set 20% of their ticket prices using AI. We've got to turn this around before things, frankly, get even worse.
- [45:53]
B
That's Greg Cassar. He's the U.S. representative for Texas 35th district. Also with us, Jay Zagorski. He's a professor at the Boston University Questrom School of Business and the author of the Power. Thanks to you both. Today's producers were 1A's Chris Costano and click here's Sean Powers. This program comes to you from WAMU, part of American University in Washington, distributed by NPR. I'm Jen White. Thanks for listening. We'll talk again tomorrow. This is 1A
- [46:24]
A
that was part of a conversation with 1A host Jen White on surveillance pricing. You can hear the full segment@wamu.org Click
- [46:35]
C
here is a production of recorded future
- [46:36]
A
news and PRX Today's show was written and produced by Megan Dietre, Sean Powers, Erica Gajda, Zach Hirsch, and Casey Georgie.
- [46:45]
C
It was edited by Karen Duffin and
- [46:47]
A
Sarah Cavedo and fact checked by Darren Ancrum.
- [46:50]
C
Original music is by Ben Levingston with
- [46:53]
A
additional music from Blue Dot Sessions. Our staff writer is Lucas Riley, our illustrator is Megan Gough, and our sound designers and engineers are Jake Cook and Jesse Niswonger. I'm Dina Temple Raston, and thanks for listening.
- [47:17]
E
Support for this program comes from Recorded Future. In cybersecurity, the biggest risk isn't what can be seen, it's what gets missed. Recorded Future analyzes billions of signals to help organizations stay ahead of threats. Recorded Future Know what matters?
- [47:31]
J
Act first if you're looking for a daily guide to cybersecurity news and policy, sign up for the Cyber Daily from Recorded Future News. It serves up the day's most interesting and important cyber stories from our sister publication the Record, and then aggregates all of the big cyber stories you might have missed from news outlets around the world. Just go to TheRecord Media and click on Cyber Daily to get all you need to know about the world of cybersecurity right in your inbox.