How to Beat Surveillance Pricing Before It Bleeds You Dry

Your comparison shopping must now include logged-in vs. logged-out, app vs. web, and even different geographic locations via VPN.

Lindsay Owens, CEO of Groundwork Collaborative and former economic policy advisor, discusses "surveillance pricing" and its impact on consumer costs in her new book, "Gouged: The End of a Fair Price and What That Means for Your Wallet." Owens explains that while fixed prices were once a norm, new technologies have enabled companies to personalize prices based on an individual's estimated willingness to pay, a practice she calls surveillance pricing. This method, akin to first-degree price discrimination, uses personal data harvested through loyalty programs and app interactions to charge customers more, especially when they exhibit strong loyalty or urgency. Owens warns that generative AI and agentic commerce could further exacerbate these issues by automating upsells and personalized pricing, potentially making shopping more exhausting and costly for consumers. She notes that while federal action is slow, states are beginning to enact legislation to curb algorithmic pricing, with some laws already passed in Connecticut, New Jersey, and Maryland.

The core issue is that companies are no longer bound by traditional pricing strategies and are leveraging technology to extract maximum value from individual consumers. This shift from a fixed-price model to dynamic, personalized pricing, driven by extensive data collection and analysis, means that loyalty and engagement can paradoxically lead to higher costs. As AI capabilities advance, the sophistication of these pricing strategies is expected to increase, potentially creating a more challenging environment for consumers to secure fair prices.

The rise of surveillance pricing indicates a broader trend toward hyper-personalization in commerce, extending beyond just pricing to other aspects of the consumer experience. The development of AI agents that automate purchasing decisions could amplify these effects, either by optimizing for company profits through automated upsells or by further eroding consumer agency if not regulated. The push for legislative action at both state and federal levels suggests a growing recognition of the need to establish new consumer protections in the digital marketplace.