Consumer Reports supports Colorado bill HB 1264, which would prohibit surveillance pricing and wages with reasonable exemptions. Surveillance pricing, also sometimes referred to as “personalized” pricing, is when a company uses data that they’ve gathered about a consumer—often without the consumer’s knowledge or consent—to set the price of a product or the discount offered to a consumer.
HB 1264 prohibits the use of data related to a person’s characteristics, behavior, or biometrics to automatically and secretly inform the price or wage they are offered. This includes, for example, data about a consumer’s race or weight, their parenthood status, their genetic information, the geometry of their face, their political affiliations, and their web-browsing history. The bill also prohibits the secret and automated use of surveillance data to target groups of individuals with prices. It has several reasonable exemptions, such as discounts for groups that are consistent with antidiscrimination law, that are disclosed publicly, and that are based on consumers affirmatively and voluntarily providing information
Surveillance pricing can be difficult to detect, because consumers rarely have a view into what information a company has about them, or what the prices they see are based on. Still, enterprising journalists have discovered examples.
- An investigative journalist writing for SFGate looked at the prices offered for a hotel room in Manhattan for a specific date, and varied his operating system, browser, cookies, and location (his computer’s IP address). He found that when he changed his IP address from a Bay Area location to locations in Phoenix and Kansas City, the prices dropped by more than $200 per night in one instance, and more than $511 in another instance.
- ProPublica found that test-prep company Princeton Review was offering different prices for its tutoring services depending on a customer’s zipcode. The result, they found, was that Asian customers were nearly twice as likely to receive a higher price.
- The Wall Street Journal reported that Orbitz, the travel aggregation company, determined that Mac users spent more per night on hotels than Windows users, and began steering Mac users towards pricier hotels.
- A Minnesota local news site discovered that Target changed the prices displayed on its app for certain products based on whether the customer—and their device—was physically inside a Target store. When the reporters looked at the Target app while inside a store, they found that a Graco car seat was $72 more expensive than when they had been sitting on the far side of the Target parking lot, and a Dyson vacuum was $148 more expensive.
For more, please see the attached PDF.