Report from Gizmodo
In Brief – Democratic state lawmakers are increasingly proposing legislation to curb so-called “surveillance pricing,” a practice in which retailers use data and technology to help set prices, claiming that AI will be used to rapidly change prices for different consumers. At least a dozen states, including Arizona, Illinois, Virginia and Pennsylvania, are considering measures this year. Last year, New York enacted the Algorithmic Pricing Disclosure Act, which did not ban the practice but requires companies to notify consumers when algorithms use their personal data to help determine prices. A proposal in Pennsylvania focuses on stores and prohibits changing prices on “essential goods” more than once within a 24-hour period. Concern about dynamic pricing has grown as digital tools make it easier to adjust prices instantly, with AI fears adding to the mix. While prices have historically been more dynamic online, in-store technology, such as digital shelf labels (DSLs), are being presented as a new threat to consumers. Walmart, which plans to install them in all locations this year, says DSLs improve efficiency and emphasized that prices will remain “the same for all customers in any given store.” George Slover of the Center for Democracy and Technology said some pricing fears resemble science-fiction scenarios, noting that public concern may be “getting a little bit ahead of what’s really happening.”
Context – Stories about digital technology and the internet being used to unfairly target consumers and nefariously raise prices have been around for years. Fear of AI being involved is only the latest iteration and another example of science fiction narratives filling the vacuum when nobody knows how AI systems will evolve. New York’s law to require retailers to post a warning label when they use “personal data” in pricing survived a retailer legal challenge that it violated the First Amendment ban on compelled speech, and the NY legislature is considering several other bills banning various technologies in retail, including DSLs. The technology has been used by European retailers for years without any of the dystopian scenarios.