Will Consumer Data Collection Lead to Algorithm-Adjusted 'Surveillance Pricing'? (msn.com) 70
An anonymous reader shared this report from the Washington Post's "Tech Brief":
Last fall, reports that Kroger was considering bringing facial recognition technology into its stores sparked outcry from lawmakers and customers. They worried personalized data could be used to charge different prices for different customers based on their shopping habits, financial circumstances or appearance. Kroger, the country's largest supermarket chain, had already been using digital price tags in its stores.
Kroger told lawmakers that it doesn't use facial recognition to help it set prices, a stance the company reiterated to the Tech Brief on Thursday. Still, the uproar helped to spark a push by consumer advocates who warn that the threat of invasive, personalized pricing schemes is real. Now, Democratic lawmakers in several states are working to ban so-called "surveillance pricing" — when businesses charge customers more or less for the same item based on their personal information.
Besides a bill in California, three more bill were introduced this month in Colorado, Georgia, and Illinois that also ban "surveillance wages," which the article defines as employers adjusting wages based on how much data an employee collects. "Both surveillance pricing and surveillance wages really disrupt fundamental ideals of fairness," University of California, Irvine law professor Veena Dubal tells the Washington Post.
Dubal is one of the consumer advocates behind a new report which notes information released last month by America's consumer-protecting FTC that "suggests that surveillance pricing tools are being actively developed and marketed across a range of industries, including consumer-facing businesses like 'grocery stores, apparel retailers, health and beauty retailers, home goods and furnishing stores, convenience stores, building and hardware stores, and general merchandise retailers such as department or discount stores." The consumer advocates (which include the Electronic Privacy Information Center) put it this way.
"Imagine walking into a grocery store and seeing a price for milk that's higher than what the next shopper pays because an algorithm calculated that you're willing to spend more..."
Kroger told lawmakers that it doesn't use facial recognition to help it set prices, a stance the company reiterated to the Tech Brief on Thursday. Still, the uproar helped to spark a push by consumer advocates who warn that the threat of invasive, personalized pricing schemes is real. Now, Democratic lawmakers in several states are working to ban so-called "surveillance pricing" — when businesses charge customers more or less for the same item based on their personal information.
Besides a bill in California, three more bill were introduced this month in Colorado, Georgia, and Illinois that also ban "surveillance wages," which the article defines as employers adjusting wages based on how much data an employee collects. "Both surveillance pricing and surveillance wages really disrupt fundamental ideals of fairness," University of California, Irvine law professor Veena Dubal tells the Washington Post.
Dubal is one of the consumer advocates behind a new report which notes information released last month by America's consumer-protecting FTC that "suggests that surveillance pricing tools are being actively developed and marketed across a range of industries, including consumer-facing businesses like 'grocery stores, apparel retailers, health and beauty retailers, home goods and furnishing stores, convenience stores, building and hardware stores, and general merchandise retailers such as department or discount stores." The consumer advocates (which include the Electronic Privacy Information Center) put it this way.
"Imagine walking into a grocery store and seeing a price for milk that's higher than what the next shopper pays because an algorithm calculated that you're willing to spend more..."
Re:After thinking about this (Score:4, Interesting)
And I do think they would do it. Oh, it would be called a 'discount' for some instead of a penalty on others, of course...
Re: After thinking about this (Score:2)
I don't understand this. It's individuals deciding price X is too high- won't everyone who is presented with price X that thinks it's too high continue not to buy? Isn't everyone paying price X+1 happy to do so? Isn't "we don't vary pricing" a potential differentiator in the market?
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The cartel maximizes their profits by charging $9 as it captures "enough" peoples "not too much" price.
Now they can still charge the $9 as a minimum and increase it dynamically to whatever each individual's "not too much" price is. It's all pure extra profit, no lost sales.
If your personal "too much price" was $10, you'd be happy to give them an extra dollar each time for no reason? When the people in line next to you only pay $9?
Do you generally overpay when you think things are not "maximum price"?
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It's naive on a few levels.
One is that certain products and services have very inflexible demand. Health care and energy are two great examples; No matter how much it costs, you're going to need medicine and electricity/gasoline/home heating, so you either come up with the money or you suffer. Price discrimination goes right out the window as soon as the market realizes they can charge almost whatever they want.
Another is the idea that "we don't vary pricing" being a potential differentiator. Technically ye
Re: After thinking about this (Score:1)
Perhaps you should return to your studies to learn what a competitive market is. And no, the answer to whether price discrimination yields more profit is *not* almost certainly yes. In a competitive market it's almost certainly a lost sale- that's *why* there is an equilibrium price.
I note we were discussing grocery stores and not health care. Besides, you're ignoring who the customer is anyway- it's the government or the CEO who signs the coverage contrac
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> Perhaps you should return to your studies to learn what a competitive market is.
Perhaps you should pull your head out of your ass and notice that reality is under no obligation to obey your naive ideals.
> I note we were discussing grocery stores and not health care.
Turns out food, much like healthcare, is also one of those highly inelastic demand items. Either you find a way to pay the asking price or you suffer. This is such an obvious and real problem that food is one of the most heavily subsidize
Re: After thinking about this (Score:2)
It's been done before. Some magazines would send people who frequently purchased items catalogs with higher prices.
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I don't think it's as bad online, where you're generally shopping for larger items one at a time, and can more easily compare options between websites. Like when you go to buy a car or a home, it is expected you are going to get squeezed on individual pricing and have to put some work into it.
But that isn't practical when you're scooping up an armload of groceries that are a few bucks each.
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Already supermarkets collect massive data through their loyalty programs. You think they give you a discount for your data? Ha. They penalize the unwilling, and can still get the data through payment systems, and I doubt there is any effort to prevent that.
Surge pricing? All you need is the threat of bird flu and millions of egg layers destroyed, and pricing surges. A single railcar accident can cause that. Wait until HHS acts on food coloring and a variety of additives, and producers have to change, the o
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I still go to brick and mortar stores and pay cash so I don't think they'll do "Algorithm-Adjusted 'Surveillance Pricing'" with me. They might do it depending on the store location although but they don't have my customer data since I don't use fidelity points or any other shenanigans like that. Also, I never see targeted ads related to what I bought lately when I browse the Internet.
Re: After thinking about this (Score:3)
I still go to brick and mortar stores and pay cash so I don't think they'll do "Algorithm-Adjusted 'Surveillance Pricing'" with me.
They don't need you to pay with plastic to do this. You're likely using a store loyalty card for fuel points or digital coupon redemption that they can track your purchases through instead. And they can enforce that by simply charging a rather high regular price for an item you can get a discount on by using your store loyalty card (they already do this with scattered items).
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The article was about using facial recognition technology to automatically adjust prices, which sounds like it would work with you.
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Have you shopped for a car, or furniture, lately?
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Yah, I want every price to be set based on being part of a preferred age group, class, region, etc etc.
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Finally its benificial to dress like shit (Score:3)
I have a friend who says he always dresses poorly when making large consumer purchases from certain folks like car dealers because they'll lower prices for people who look poor. Why not extend this into all spheres of life?
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Think it will help if I wear blackface?
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Justin, is that you?
Re:Finally its benificial to dress like shit (Score:5, Insightful)
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Maybe they do try to sell him on shitty deals, I'm not sure. dressing poorly and then trying to buy a car with cash might make your dress fail to trick anyone, and getting bad loans is bad. On the other hand, buying a car is all about negotiation, or so they say, and you can and should get lones from other places than the dealership.
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Or you have to VPN into an airline website or amazon from a poor country to see prices adjust
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I have a friend who says he always dresses poorly when making large consumer purchases from certain folks like car dealers because they'll lower prices for people who look poor.
Or they'll offer you a higher interest rate ...
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Car dealers are notorious for figuring out ways to squeeze poor people for anywhere from 50% to 500% more than they charge people who obviously have the money and resources to fight back.
Doesn't make sense for brick and mortar (Score:4, Informative)
Brick and mortar stores might have electronic price tags, but is the store's system really going to track you to the point that it knows what price it showed you, and remembers it when you arrive at the register? Amazon tried something like this with its cashierless stores, but backed off because the technology wasn't accurate enough without having actual humans watch you shop. There would be way too many issues with the system showing one price on the shelf, and charging you a different price at the register. Stores that use electronic price tags do use them to change prices from a central database, but they don't change the prices minute by minute, and certainly not shopper by shopper, but day by day.
Online is a different story. Amazon already uses profiling to set prices, or at least to steer you to products listed at the price it thinks you'll pay.
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Amazon tried something like this with its cashierless stores, but backed off because the technology wasn't accurate enough without having actual humans watch you shop.
I'd say he technology wasn't mature enough yet.
There would be way too many issues with the system showing one price on the shelf, and charging you a different price at the register.
I've wondered about that too. But if their tracking is granular enough then they'll recognize you at checkout and charge "your" price. It will be interesting when people doing self-checkout next to each other compare prices and raise hell.
But in those cases the store will then just charge the lower price to both. And there will be apps that allow people to compare prices in the store in real time - of course THOSE apps will probably charge a subscription fee, a
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Hmmm maybe, but I think the whole scenario is far-fetched.
A lot of this comes down to the reputation of a store. Only scumbag companies would try this kind of stuff. Established chains like Kroger and Walmart stake their reputations on selling things at a reasonable price. They're not going to suddenly start gouging specific customers because they have electronic price tags on the shelves.
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No doubt.
The only kinds of stores that would even try this sort of thing, are ones that don't care about their reputation. This is why you do business with stores you can trust.
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It doesn't make sense for a lot of circumstances.
I mean, it's already pretty widespread knowledge when checking for plane tickets to try incognito mode to see if maybe you could get better rates.
The problem with implementing dynamic pricing per-customer is just how much pricing information is out there.
Doing it in a store is basically impossible - those tags cannot be updated quickly (what if multiple customers are gathered around for the same item - which price do you show?), and customers, if they get wis
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Yeah. It's funny how the usual suspects are all about "progressive" taxation, but will cry, bitch and moan about progressive pricing.
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Not really, the top 10% of wage earners still pay the lion's share of taxes in the United States.
https://taxfoundation.org/data... [taxfoundation.org]
It is interesting that the top 1% does pay less of their overall I come than the next 9% below them, but the top 1% is still paying just over 40% of all taxes. The next 9% below them are responsible for another 30% or so. The middle class isn 't really paying shit anymore.
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From your linked page...
The top 10% of wage earners in the US pull in just about 50% of all income earned in the US. So the fact that they pay 72% of the income taxes paid does not seem particularly problematic.
The top 1% of wage earners in the US is pulling in just about 26% of all income earned in the US - so, again, them paying 40% of the income taxes paid is not problematic... unless you consider it too low of a percentage.
The middle class is paying just about all of that other 28% - which makes it puzz
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The top 10% could be pulling in 50, 70, or 90% of all income. They're still paying all the bills. What more do you really want? The point of taxation isn't to punish people for making money. It's to pay the bills. And they're doing it.
Has it occurred to you that our progressive tax system has created a government of the rich, for the rich, and by the rich? When the bottom 90% contribute only ~30% of all tax revenue, it shouldn't surprise you when Washington insiders neglect the majority.
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Those who make more pay higher percentage of income in taxes, subsidizing those who make less. In case of surveillance pricing, those who are more affluent pay more for products, subsidizing the costs of store maintenance etc (if a lot of rich people shop there, stores will have better amenities, checkouts and such, even the poor who pay less can use them).
I think that's probably true. But note that "rich" is a relative term. The rich people in the future you've painted will be the folks that we now refer to as lower-middle-class - that will be the hard upper boundary between the serfs and the parasite class.
So, if democrats are for progressive taxation, why are they against progressive pricing?
I think we liberals might be in favour of it - with a little bitching and dragging of our feet - if it was done fairly. But anyone who has been paying attention and not drinking the Kool-Aid knows that this is simply another means of making the rich drama
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Furthermore, you're overly optimistic in that financial dispositions are the only factor entering
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I'm certainly not going to visit any store that has electronic price tags.
So you never buy anything from the internet (by definition electronic pricing), or buy airplane tickets, concert tickets, etc?
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There's multiple differences here - one is that progressive taxation is based on the idea that if you're rich, you're using the commons and the services society provides to a greater extent, thus you should contribute more.
Obviously, even with a flat tax percentage, the more you earn, the more you contribute. You make 2x, you pay twice the tax. Progressive taxation say if you make twice, you must pay more than twice the tax. If you define "rich" as the level at which progressive tax rates kick-in, that makes every American who pays taxes rich (since below certain income level you pay 0% federal income tax).
Laws will need to be carefully crafted ... (Score:1)
... to avoid unintended consequences like:
No more discounts for students, military, senior citizens, etc. "because personal information."
No more loyalty discounts "because personal information."
No more competitive-trade-in discounts "because personal information."
That won't be the intent, but someone somewhere is going to sue because they didn't get the discount someone else did because of "personal information."
In other words, any law will need to carve out exceptions for discounts like the ones above.
discounts that any one get and based stuff that is (Score:2)
discounts that any one get and based stuff that is the same for all May be fine.
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I'm dubious (Score:2)
"Imagine walking into a grocery store and seeing a price for milk that's higher than what the next shopper pays because an algorithm calculated that you're willing to spend more..."
Okay, you see a higher price on the digital price tag, but how does that track to the UPC/bar code during checkout? What if you alter your appearance before checking out, what price do you get charged, etc .. Unless they tracked you specifically and what you picked up, all over the store and not just using discrete FR shots, how do they implement this. Seems like it might require some computing effort in the back of the store. I get the theoretical concern, but am dubious about it in practice.
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Given the stores have to know that there'll be a mass exodus of shoppers the moment they try to implement something like this... I am extremely dubious about it ever happening.
It's not like it would be hard to spot this practice.
As soon as (Score:2)
Someone makes the claim they were charged more because they are a minority, this will go up in a ball of flames.
I am amused that the business class hasn't thought this through as to blowback.
People like the concept of equal treatment in the marketplace. Give that up and it will get ugly in ways unseen since labor riots.
Consumer or business? (Score:2)
I'd phrase it another way to make it clearer to the business interests: "Imagine you run a grocery chain and you discover that your supplier is charging you a higher price than your competitors pay because he noticed your profits are higher and you can afford to pay more.".
The problem is inefficiency (Score:3)
If prices depend on personal information the. At some point it will make sense to hire shoppers to shop for you. It will also make sense to change behavior to appear less able to pay, to do things like spending a lot of time looking ant prices but not buying.
There will also be mistakes where the algorithm overestimates someoneâ(TM)s ability to pay and they can no longer afford to shop. The can try other stores, but again more wasted time
Surveillance pricing? (Score:2)
Would progressive pricing really be so bad? (Score:1)
>"Imagine walking into a grocery store and seeing a price for milk that's higher than what the next shopper pays because an algorithm calculated that you're willing to spend more..."
Now imagine walking into a grocery store and seeing a price for milk that's lower than what the next shopper pays because an algorithm calculated that they're willing to spend more. Sounds pretty fair to me.