Uber, Kroger Lobby as Congress Scrutinizes Surveillance Pricing

Litigation and consumer protection attorney Benjamin Genn was quoted in a Bloomberg Law article about increasing federal scrutiny of surveillance pricing practices. Congress has targeted more than 30 companies across industries ranging from grocery and food retail to technology and rental housing to learn how exactly they're using data in price-setting mechanisms, whether artificial intelligence or algorithms are involved, and whether individualized consumer data factors into those processes. The long-standing practice of dynamic pricing, in which companies look to market conditions or time of day to change prices, remains generally lawful, whereas surveillance pricing, which uses personal data such as browsing history or demographics to set individual prices for individual consumers, is the focus of current enforcement actions.

Benjamin, who recently authored a Holland & Knight alert breaking down this distinction and surveying the state and federal regulatory landscape in this area, told Bloomberg Law companies should be prepared to provide detailed explanations of their pricing decisions, including the business justification for the methods they employ, as well as evaluate vendor contracts to understand what data pricing tools those groups use.

"The first question is really, can you explain whether two consumers are seeing different prices? And if so, why?" he said. "If the answer is inventory, geography, cost, supply-demand, then that's one conversation. If the answer is some use of personal data or using the consumer's inferred willingness to pay, then that's a very different risk profile that the company needs to drill down into."

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