Consumer Reports submitted testimony in support of a Pennsylvania bill that prohibits surveillance pricing, HB 1942. Surveillance pricing, also sometimes referred to as “personalized” pricing, is when a company uses personal data that they’ve gathered about a consumer—like data about their online search history, or inferences about family structure, health conditions, or income—to set the price of a product or the discount offered to a consumer.
For example, 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.
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.
House Bill 1942 prohibits the use of a consumer’s personal data gathered by electronic surveillance technology to set a customized price. The bill has several reasonable exemptions, for common and transparent discounts, as well as exemptions for credit and insurance products.
However, CR recommended that HB 1942 be strengthened in a few places to offer the level of protection that Pennsylvanians deserve. For example, CR encouraged legislators to update the definition of “personal information” to reflect how consumers’ data is collected and shared online. CR also suggested that the exemptions for discounts be more narrowly tailored, so that those exemptions cannot be abused.
For more information, please see the full letter linked above.