Washington, D.C. — As artificial intelligence (AI) makes surveillance pricing more intrusive and unfair, a new issue brief from the Center for American Progress urges the Federal Trade Commission (FTC) to limit the harmful ways businesses can use personal data and to give consumers more control over how their information is used to set prices.
The brief makes the following key recommendations:
- Disclosure alone is not enough to protect consumers from surveillance pricing. The FTC should pair transparency requirements with substantive safeguards and meaningful consumer choice over whether personal information is used to set individualized prices.
- Not all algorithmic pricing is surveillance pricing. Policymakers should distinguish legitimate dynamic pricing based on factors such as supply, demand, and inventory from pricing based on an individual consumer’s personal data, behavior, vulnerabilities, or inferred willingness to pay.
- Personal data should not be fair game simply because a company possesses it. The FTC should establish guardrails around the use of sensitive information and consumer data for price-setting, and participation in loyalty or rewards programs should not become a gateway to broader commercial surveillance.
- Federal action should build on growing state efforts. As states begin adopting substantive protections against surveillance pricing, the FTC should strengthen its enforcement approach and Congress should ultimately establish durable federal safeguards for consumers.
Several states—including Connecticut, Maryland, New Jersey, and New York—have already passed laws to protect consumers from the potential harms of surveillance pricing, and others are currently weighing proposals. The FTC should assess the impact of these state policies and consider how they can serve as models for further action.
Read the recommendations: “5 Ways the FTC Can Protect Americans from AI-Fueled Surveillance Pricing” by Megan Shahi, Zoë Baird, and Jared Bernstein
For more information on this topic or to speak with an expert, please contact Sam Hananel at [email protected].