FTC Launches Probe Into 'Surveillance Pricing' 48
smooth wombat writes: The FTC has sent mandatory notices for information to eight companies it says engages in "surveillance pricing", the process by which prices are rapidly changed using AI based on data about customer behavior and characteristics. This process, the FTC claims, allows companies to charge different customers different prices for the same product.
The list includes Mastercard, JPMorgan Chase, Accenture and consulting giant McKinsey. It also includes software firm Task, which counts McDonald's and Starbucks as clients; Revionics, which works with Home Depot, Tractor Supply and grocery chain Hannaford; Bloomreach, which services FreshDirect, Total Wine and Puma; and Pros, which was named Microsoft's internet service vendor of the year this year. "Firms that harvest Americans' personal data can put people's privacy at risk," FTC Chair Lina Khan said in a news release. "Now firms could be exploiting this vast trove of personal information to charge people higher prices."
The list includes Mastercard, JPMorgan Chase, Accenture and consulting giant McKinsey. It also includes software firm Task, which counts McDonald's and Starbucks as clients; Revionics, which works with Home Depot, Tractor Supply and grocery chain Hannaford; Bloomreach, which services FreshDirect, Total Wine and Puma; and Pros, which was named Microsoft's internet service vendor of the year this year. "Firms that harvest Americans' personal data can put people's privacy at risk," FTC Chair Lina Khan said in a news release. "Now firms could be exploiting this vast trove of personal information to charge people higher prices."
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That would be "the pricing changes often so we can't really create advertising that would be accurate long-term". But I suppose that could go into surge pricing, too. I think this is more like "using information gathered on the customer from unrelated activities and third-parties" to figure out highest price they can charge and get the consumer to buy at.
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It sucks for the customer, for sure...BUT, I don't see this as being illegal currently in any way.
I mean, it's not against the law for businesses to maxi
Re: "Call for pricing" (Score:2)
Re:"Call for pricing" (Score:5, Informative)
How it is done can affect whether it is illegal or not. FTC just wants the data for now so that they can check it.
- There are protected classes: if this differential pricing takes into account race then it could be very much illegal, and if allowed opens to the door to re-segregation (the front of the restaurant is priced lower for whites than minorities).
- If differential pricing is secretive so that the customer cannot negotiate fairly - in thise case customer may be an individual, or a corporation. This could raise antitrust issues, or break price fixing rules, such is if Microsoft got a better deal than Amazon, or a mom and pop store.
- There is the Robinson-Patman Act, which specifically prohibits price discrimination, such as disallowing lower prices for "preferred" customers, since these are anti-competitive practices. There needs to be legal justification to allow different treatment between customers (ie, for insurance it's ok to give good drivers lower rates). This usually applies to when companies are customers (you can't give chain stores lower prices than mom and pop stores, but you can give bulk discounts). But it also applies to invididuals who are customers.
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It sucks for the customer, for sure...BUT, I don't see this as being illegal currently in any way.
I mean, it's not against the law for businesses to maximize profit and charge "what the market will bear'....It's just basically a change of the definition of "the market" from the masses to the individual due to technology.
Your face when the black person line behind you pays less for the same item.
The store's cameras noticed you drove in a premium vehicle and you're caucasian. Going by the statistics you're automatically more wealthy and can afford it.
Car dealerships and negotiated prices (Score:2)
Fully expect big ticket negotiated products like cars, houses, etc. to full into using AI to 'bias' sales processes, calls, quote details, touch points, etc. based on the perspective buyer's demographics, age, gender, address, credit, ...
How and when and how to determine if this is discriminatory redlining is to be found out.
From: https://www.autoalert.com/four... [autoalert.com]
"Every department wins when you can easily predict customer behavior and quickly identify customers who can upgrade even in today’s market."
Capitalism in Action (Score:5, Interesting)
Isn't this exactly what all this data gathering was supposed to do (started as "targeted ads")? Maximize money extraction from customers? How is suddenly something we're looking into? This is a consequence of not having useful consumer protection laws and real privacy rights.
Re:Capitalism in Action (Score:5, Interesting)
Instead it is used to price gouge you. If enough companies are doing this with your data then they are essentially colluding instead of competing for your business.
That is not capitalism. Capitalism is about a freely competitive market.
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"Free markets" that's a good one!
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That is not capitalism. Capitalism is about a freely competitive market.
Capitalism is simply the private ownership of the means of production.
The other stuff is, well, other stuff.
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Capitalism is about creating an imbalance of power in order to concentrate wealth. Owning the means of production is one way of doing that, but there are many others. Like this example, of manipulating prices to extract the maximum amount of money from the consumer.
People tend to feel that it's wrong because it highlights that power imbalance. Some places ban it entirely, and things like it. For example, in the UK a restaurant chain cannot charge more for something in one location and less in another, i.e.
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The end game of capitalism is essentially company towns where your wages go straight back to the company who paid them because the company owns all the stores, all the housing and all of the government, preferably keeping people in debt to ensure they cant move anywhere else or otherwise act independently.
The free market is one of the few things standing in the way of that, regulations and laws are another of e
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Well, if you're talking about legal discrimination, that's only based (in the US) upon whether said discrimination is based on current "protected classes"...sex, race, etc.
Other than that, for the most part, it's open season...especially on financial basis.
Of course, if said "discrimination", based on anything BUT protected classes...is found by chance, to line up with folks by those classes anyway...THEN they wil
This is why you shop around. (Score:2)
My gripe is the obvious price collusion between all retailers, although with the internet connected everything I don't see how any effort would be enforceable or practical.
Now if the 'surveillance price' is proven to follow someone from retailer to retailer that collusion case just got a lot easier to win.
A much more informative version (Score:4, Informative)
TFA is really lacking in details and seems a bit confusing to me. Here's a much better version of the story:
https://www.theverge.com/2024/7/23/24204011/ftc-surveillance-pricing-investigation-mckinsey-mastercard-chase
My first thought was that this is a logical evolution of high-speed trading in the stock market. Logical, that is, from an economic 'rape-and-pillage-is-our-right-and-duty' perspective.
It's really WAY past time that 'Corporation 1.0' had a stake hammered through its heart, its body burned, and its ashes pissed on. Seriously, I'm afraid the torches-and-pitchforks opportunity is just a speck in the rear-view mirror. We really needed to start making corporate law serve the public interest 40 or 50 years ago. Now the corps are too powerful and have too much political control.
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You need critical thinking and media literacy skills taught to the general population in public schools and you need to keep those kids in public schools so they're not shunted off to fake private schools where their heads are filled with nonsense.
That's why I bristle and complain every time corporations involve themselves in public education, and our so-called representatives allow it to happen. It's been going on for a while now, and as far as I'm concerned they obliterated the line they kept crossing when they started pushing hard for CS courses in schools.
Sure, learning about computing and programming should be an option, and maybe it should be encouraged to an extent. I question whether it should be mandatory. And I sure as hell don't trust the
We have direct quotes (Score:2)
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There was a professor who supported Reagan's policies with the quote [theintercept.com] you mentioned:
Freeman’s remarks were reported the next day in the San Francisco Chronicle under the headline “Professor Sees Peril in Education.” According to the Chronicle article, Freeman said, “We are in danger of producing an educated proletariat. That’s dynamite! We have to be selective on who we allow [to go to college].”
I'd like to know the real story here. Personally, I don't like public funding of education because it:
Gay / Reproductive rights poll at 70% (Score:2)
Odds are you have an overactive fear response. There are several studies showing right wingers are prone to fear. But you're also human, you can overcome that if you try.
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This is Corporations 3.0.
The Founders knew the dangers of the Mercantalists (East India Company etc. - Corporations 1.0) so American corporations could only be for public purposes and for a limited time. e.g. building a train track or a canal. Corporations 2.0.
Partnerships were the dominant type of company with owner accountability.
Then JD Rockefeller bought off a majority of Congress, literally, to make permanent corporations for Standard Oil. 3.0.
Heck, Boeing just got found guilty of penalties for murder
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Fair points all, and I stand corrected. Thanks for the info.
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TFA is really lacking in details and seems a bit confusing to me. Here's a much better version of the story: https://www.theverge.com/2024/... [theverge.com] My first thought was that this is a logical evolution of high-speed trading in the stock market. Logical, that is, from an economic 'rape-and-pillage-is-our-right-and-duty' perspective.
It's really WAY past time that 'Corporation 1.0' had a stake hammered through its heart, its body burned, and its ashes pissed on. Seriously, I'm afraid the torches-and-pitchforks opportunity is just a speck in the rear-view mirror. We really needed to start making corporate law serve the public interest 40 or 50 years ago. Now the corps are too powerful and have too much political control.
It's gone way beyond the corporations themselves. Even people currently suffering financially because of the power of the corporations may slide into reactionary screeds of hate at anyone wishing to reform it because "competition is good" has been synonymized with "let the corporate world behave as recklessly as they want" and "scarcity breeds competition" has been synonymized with "let the corporations take as much as they want, then have the government bail them out if it backfires when they actually crea
Gas prices (Score:2)
Only real-world example of this sort of rapid price changes that I've seen is with gas prices. They can be lower in the morning and higher later in the evening, and sometimes a good $0.15 cheaper a few miles down the road from the same gas station brand. In fact, this shady pricing was a considerable factor in my decision to get an EV. I was completely fed up with buying gas like it was trying to play the damn stock market.
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Another example of time-of-day pricing is when restaurants charge lower prices for lunch than for dinner.
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Another example of time-of-day pricing is when restaurants charge lower prices for lunch than for dinner.
Usually restaurants have their lunch menu pricing available, so you can decide if it's worth eating earlier to save a few bucks. Gas stations don't disclose anything other than their current pricing.
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The portion size of the "lunch menu" version is often not the same size as the full dinner version, so the price difference makes sense. The idea may be considering that patrons will have a smaller appetite for a midday meal, or want something that can be finished faster (because the diner is on a lunch break from work, and/or can't store leftovers easily).
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Not just smaller portion sizes but also cheaper ingredients and easier to prepare dishes. And they do this to keep the seats filled with paying customers. The contrapositive is that they do the opposite to raise prices at dinnertime to keep lines short so people whose time is worth the most (rich people who are willing to pay more for dinner) don't choose a different restaurant.
This is the same goal behind changing gas prices multiple times a day, and why airlines charge different fares for the same route d
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If anyone is interested https://www.fuelcheck.nsw.gov.... [nsw.gov.au]
Isn't this communism from a different angle? (Score:2)
If people determined to be wealthier are charged more, the flip side is that those who are poor will pay less.
That means the value of your money will change as you accumulate more, bringing everyone closer to the same effective wealth.
That might maximize profit for a few companies, but for the population level it's making everyone financially equal regardless of their bank statement.
That isn't going to work out.
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Well, if that's the case, then I wanna get to work to putting together multiple "poor" onl
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Stop your bullshit concern trolling over those oppressed "poor people". You are a right wing troll and you've spent your entire life whining about taxes and welfare queens and voting to de-fund social services. I expect you get actual joy when you know that someone you look down on suffers. The right is full of sadistic jerks like you, and unfortunately Slashdot is stuffed full of your ilk.
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It tends more towards wealthy people with 3 stores within a mile get lower prices, poor people who have to drive 10 miles to the next store pay more.
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If people determined to be wealthier are charged more, the flip side is that those who are poor will pay less.
I rather think what will happen is that the wealthier will be charged "more more", while the poor will merely be charged "more". Some might say the two are equivalent, but I think there's a difference.
It reminds me of store loyalty incentives. Sign up for our 'club' or whatever, give us your email address, and get discounts on products. Anybody who thinks they're getting a 'discount' is at best naive.
Companies never leave money on the table. First, the prices are artificially inflated so the club members wi
Not a new practice (Score:2)
This process, the FTC claims, allows companies to charge different customers different prices for the same product.
Oh, you mean the way insurance companies charge you a different amount based on the risk they think you present?
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Do young women still get cheaper auto insurance rates than young men?
This is not new (Score:3)
Amazon has been doing it for years.
The companies that do things like this seem to assume that customers are stupid. A lot of customers recognize what's going on and play it like a game.
My wife has developed the skill to play the game and always seems to find the lowest prices using a variety of tactics
Re:This is not new (Score:4, Interesting)
Please share your wife so we can all learn!