The Indicator from Planet Money

Episode Title: Should "surveillance pricing" be banned?
Date: September 23, 2025
Hosts: Adrian Ma, Darren Woods

Episode Overview

This episode dives into the rise of "surveillance pricing," also known as personalized pricing. The hosts discuss how companies, particularly in the digital world, use consumer data to set individualized prices — a topic thrust into the spotlight following news about Delta Air Lines’ AI-powered pricing. The conversation explores the ethical, economic, and technical implications of this practice: is it as sinister as it sounds, and should it be banned or regulated?

Key Discussion Points and Insights

What Is Surveillance Pricing?

• Definition: Surveillance pricing, or personalized pricing, is when companies use personal data (like your location, demographics, or browsing history) to set individualized prices tailored to your perceived willingness to pay ([03:07]).
  • Sam Levine (former FTC director): “The goal is to charge each person most that they're willing to pay.” ([03:07])
• Data Collection: Companies gather data via web browsers, cookies, apps, or data brokers, and use this for targeted ads and, potentially, for pricing ([03:21]).

Legality and Scope

• Current legal status: Not illegal, though it’s contentious.
  • Darren Woods: “…this is not illegal, but... it’s the kind of consumer harm Sam was looking for when the FTC started investigating this type of pricing last year.” ([04:11])
• Prevalence:
  • The FTC's investigation found over 250 companies across sectors (grocery, hardware, apparel) engaging in, or being advised about, surveillance pricing ([04:42]).

Documented Examples

• Historical “smoking guns”:
  • 2012 Wall Street Journal: Staples and Office Depot showed different prices to customers based on location and browsing ([05:09]).
  • 2015 ProPublica: Princeton Review charged more for online tutoring to ZIP codes with larger Asian populations ([05:35]).
• Transparency Issue: Much of how companies use data is a "black box"—hard to track or prove ([05:52]).

Government and Regulatory Response

• FTC Investigation: Largely paused after agency leadership changes; no comment from the FTC despite requests ([05:52]).
  • Sam Levine comment: “The FTC's seeming inaction and lack of attention to this issue is quite worrying. And I think it's why states really need to step up.” ([06:20])
• State Actions:
  • New York requires disclosure when businesses use personalized algorithmic pricing ([06:30]).
  • Legislation proposed in Georgia, Colorado, California, and Ohio ([06:40]).

Economic and Ethical Debate

• Skeptics of Regulation:
  • Jean Pierre Dube (Marketing Professor, UChicago):
    • “The concept of a company using data that I wasn't aware they had to determine a marketing offer for me. I don't think that's all that new.” ([06:53])
    • “Calling things surveillance pricing is just a way of branding it in a very negative light..." ([07:08])
  • It's long been common for businesses to tailor prices based on perceived customer ability to pay (car dealer analogy) ([07:21]).
• Potential Benefits:
  • Differential pricing can enable lower prices for some; for instance, ZipRecruiter experiment where 60% of small businesses got a lower price than with a flat fee ([08:10]).
  • Jean Pierre Dube: “Most of these people being charged less were the smallest businesses. And so if you think small businesses deserve special advantages… this seems a lot more equitable and fair.” ([08:32])
• Consumer Agency:
  • Consent and transparency are key. The ZipRecruiter example involved voluntary data sharing, unlike the secretive practices that trouble critics ([08:44], [09:01]).
  • “[I] would definitely agree with you that it feels like consumers are losing the agency over their personal information.” ([09:01])

What Can Consumers Do?

• Mitigation strategies:
  • Regularly clear your web browser’s cache ([09:14])
  • Use private browsing or VPNs ([09:26])
  • Consider shopping in physical stores and paying in cash (jokingly presented as extreme) ([09:31])

Notable Quotes & Memorable Moments

• Adrian Ma (on data-driven ads):
  “You Google for one pair of shoes, and then suddenly those pairs of shoes are kind of following you all around the Internet.” ([03:45])

• Sam Levine (on FTC inaction):
  “I really think the FTC's seeming inaction and lack of attention to this issue is quite worrying. And I think it's why states really need to step up.” ([06:20])

• Jean Pierre Dube (on negative branding):
  “Calling things surveillance pricing is just a way of branding it in a very negative light so that people would have a hard time wanting to defend it, because how could surveillance ever be good in a free country like America?” ([07:08])

• Adrian Ma (on mitigation tips):
  “Cash seems pretty easy.” ([09:24])
  “That's going too far.” ([09:35])

Timestamps for Key Segments

• 00:12-01:16: Introduction to in-store vs. online pricing, and what surveillance pricing means
• 03:07: Sam Levine explains surveillance pricing and data collection methods
• 04:11-04:42: Legal landscape and scale of data-driven pricing
• 05:09-05:52: Historical examples and industry opacity
• 06:20-06:47: Regulatory action and legislative proposals
• 06:53-08:10: Economic arguments from Jean Pierre Dube; personalized pricing isn’t new
• 08:10-08:44: Case study—ZipRecruiter experiment
• 09:01: Consent and consumer agency concerns
• 09:14-09:35: Tips for consumers to avoid being targeted by surveillance pricing

Conclusions

• Surveillance pricing uses personal data to tailor prices online.
• There’s a live debate on whether it's exploitative, beneficial, or simply a modern update to age-old business practices.
• Transparency and consumer agency are at the core of the controversy.
• Legislative momentum varies: while the FTC has slowed its inquiry, some states are moving ahead with disclosure or regulation.
• Consumers can take basic steps to reduce risk, but solutions remain imperfect.

Tone: Engaging, lightly skeptical, and balanced—reflecting the hosts’ mix of curiosity and concern, as well as expert perspectives.