Following the rise of e-commerce in the 2000s, surveillance pricing has emerged as a potent weapon wielded by corporations and tech giants to maximize profits at the expense of consumer privacy.
This invasive practice has expanded far beyond e-commerce platforms to encompass a wide range of retail stores and industries, including retail giants like Target and Staples.
Target's mobile application, for instance, has been revealed to employ geolocation data to dynamically adjust prices based on a user's proximity to physical stores. This insidious tactic exploits the perceived commitment of consumers who have already made the journey to a physical store location, presumably increasing their willingness to pay premium prices.
Staples has also been found to manipulate online pricing based on a customer's geographical distance from competing retailers, offering lower prices to those within a 20-mile radius of OfficeMax or Office Depot locations.
In the gleaming halls of Academia, the Princeton Review has been caught implementing algorithmic pricing models that impose higher fees on Asian American customers, while ride-sharing behemoths Uber and Lyft have been accused of inflating fares in neighborhoods with higher concentrations of residents of color and those living below the poverty line.
In response to these disturbing practices, the Federal Trade Commission (FTC) has launched an investigation into the surveillance pricing practices of eight key players in the data analytics and financial services sectors, including Mastercard, JPMorgan Chase, and McKinsey & Co. FTC Chair Lina Khan has emphasized the exploitation of personal data to impose higher prices on consumers, underscoring the urgent need for actual transparency and regulatory oversight in this rapidly evolving landscape.
Naturally, we are skeptical that the FTC’s ‘inquiry’ will bring any genuine justice to the deeper underlying problems of this core issue.
A Brief History of Surveillance Pricing
The rise of surveillance pricing is inextricably linked to what Shoshana Zuboff terms "surveillance capitalism". Zuboff argues that this new economic order "claims human experience as free raw material for translation into behavioral data" (p. 8), creating a foundation upon which practices like surveillance pricing are built, and are now rampant.
This commodification of personal data also conventiently aligns with Frank Pasquale's observations in "The Black Box Society" (2015), where he notes that "finance, reputation, and search algorithms mediate more and more of our social world, but we cannot access their secrets" (p. 191). Rules for thee, not for me.
Unfortunately, the implications of surveillance pricing extend beyond mere economic considerations, touching on more fundamental, core issues of economic disparity. In "Weapons of Math Destruction" (2016), Cathy O'Neil warns that "big data processes codify the past. They do not invent the future" (p. 204), highlighting the potential for surveillance pricing to perpetuate existing economic disparity and inequality.
The genesis of surveillance pricing can be traced back to the dawn of the e-commerce era, when goliath corporations like Amazon began experimenting with dynamic pricing strategies. In the now ancient year of 2000, Amazon faced public backlash when customers discovered the company was showing different prices for identical DVDs based on user profiles. This incident, while drawing critical comments from consumers, also foreshadowed the sophisticated pricing mechanisms that would come to dominate online shopping. It also represented a time when the public wasn’t entirely desensitized to the Orwellian privacy practices of Big Tech and actually cared about such oversight from Big Data.
The actual term "surveillance pricing" did not emerge in the mid-2000s, coinciding with the rapid proliferation of social media platforms and the explosion in personal data generation and harvesting. Key players in this emerging field included all of the usual suspects: tech giants like Google and Facebook, whose vast data harvesting cosystems provided fertile ground for the development of increasingly sophisticated pricing algorithms.
Of course, the regulatory landscape surrounding surveillance pricing remains decidedly murky, with lawmakers and regulators struggling to ‘keep pace’ with rapidly evolving technologies.
Solutions
Corporations are data hungry, in response to the growing threat of surveillance pricing, we recommend a core concept: data starving. The less data corporations have to make predatory decisions and weaponize prices based on personal information and geolocation data, the more difficult they will find their jobs. Owning a degoogled phone, like Above Phone, will work wonders here.
#Ask Permission First
When using a degoogled phone you can be more conscious over giving your location permission to different apps. Because you have greater control over your permissions, websites and apps will be unable to enforce location based pricing.
Don’t Use The App
Typically, companies will have more surveillance built into the app itself - often implemented with third party analytics and trackers. If possible, keep your visits on the website, you should be able to do most things this way.
Use a VPN
There’s a reason we champion VPN services like our own Above VPN. Not only is it crucial to mask your IP address, but surprisingly few VPNs actually mask the equally important Device ID as well, which can have for instance a legal name attached to it and be a perfect tool for predatory corporations.
Despite these technological countermeasures, the most effective long-term solution to the challenges posed by surveillance pricing likely lies in comprehensive privacy legislation. The European Union's General Data Protection Regulation (GDPR), implemented in 2018, has set a global standard for data protection, imposing stricter rules on data collection and usage that have implications for surveillance pricing practices.
In the United States, efforts to pass similar legislation at the federal level have fallen short. The California Consumer Privacy Act (CCPA)—which went into effect in 2020—represents an attempt by a U.S. state to address data privacy concerns, but there is no legislation at the federal level.
In this context, the role of open-source tools and privacy-enhancing technologies has become genuinely urgent. By empowering consumers to take control of their personal data and starve out corporations, these technologies represent a grassroots approach to combating surveillance pricing and other invasive data collecting practices.
Sources
https://www.eff.org/deeplinks/2024/08/fight-surveillance-pricing-we-need-privacy-first
The Age of Surveillance Capitalism by Shoshana Zuboff
The Black Box Society by Frank Pasquale
Weapons of Math Destruction by Cathy O’ Neil
The Weaponization of Surveillance Pricing