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Surveillance pricing is a growing concern in the digital marketplace, raising questions about fairness, privacy, and consumer rights. This practice involves setting personalized prices for goods or services based on personal information companies collect about you. Using algorithms, often powered by artificial intelligence, businesses analyze data to predict how much you are willing to pay and adjust prices accordingly.

The issue recently made headlines after Delta Air Lines announced plans to expand its use of AI to set ticket prices for more of its flights. Critics warn that such systems could exploit consumers’ circumstances, potentially charging more during emergencies or immediately after payday, times when data might suggest you are more likely to spend.

How Companies Collect the Data Used for Surveillance Pricing

Surveillance pricing relies on a wide range of personal information gathered through both online and offline channels. According to a recent Federal Trade Commission (FTC) study, retailers often use data points including location, demographics, purchase history, and even mouse movements on websites to customize pricing.

Common sources of this data include:

• Apps and online activity – Many retail, travel, and grocery apps track purchasing behavior, browsing history, and location information.
• Smart devices – Products like smart TVs, speakers, fitness trackers, and connected vehicles can collect usage data that may be shared with third parties.
• In-store location tracking – Some companies adjust prices based on a shopper’s proximity to a store or their geographic region, a practice that has already sparked lawsuits.

In one high-profile example, Target faced legal scrutiny over claims it adjusted online prices depending on a customer’s location relative to a physical store.

Privacy and Discrimination Concerns

While surveillance pricing can be marketed as a form of “personalization,” it raises significant privacy and ethical concerns. For one, consumers often have little to no knowledge of how much data is collected or how it is used.

There is also the potential for discriminatory impacts. If pricing models incorporate data points correlated with race, gender, income, other protected characteristics, they could lead to certain communities consistently paying more. Location data, often linked to a consumer’s zip code, illustrates this risk, as zip codes can correlate with demographic factors.

The Current Legal Landscape

At the federal level, the United States currently has no comprehensive law regulating surveillance pricing or broadly protecting consumer data privacy. In January 2025, the FTC shared some early findings from its study into surveillance pricing. Following a change in leadership, the agency decided not to proceed with gathering public feedback and has since placed less emphasis on the issue.

Despite the absence of a federal framework, there has been growing legislative interest:

• Congressional proposals – Some lawmakers have introduced bills to ban pricing or wage-setting based on “surveillance data,” which includes personal, genetic, behavioral, and biometric information
• State-level action – a handful of states, including California, Colorado, Georgia, Illinois, Minnesota, New York, and Ohio, are considering or have enacted bills to limit or disclose the use of personal data in pricing decisions. These laws vary in scope and strength, and most states still offer no protections.

Steps Consumers Can Take

Until stronger laws are in place, consumers can take certain steps to reduce their exposure to surveillance pricing:

• Know your state’s privacy laws – If you live in a state like Colorado, you may have the right to opt out of the sale of your personal data. Understanding and exercising these rights can limit the information companies collect and share.
• Limit app permissions – Review the permissions granted to apps on your phone and disable location tracking or data sharing where possible.
• Advocate for stronger protections – If your state lacks privacy laws, consider contacting local and federal representatives to voice concerns. Organizing community support can help push for legislative change.
• Be mindful of device data – Smart appliances and wearables may collect more information than you realize. Check privacy settings and terms of service regularly.

While individual actions can help protect your information, lasting change will likely require broader legal protections. Reaching out to local and federal representatives to share your concerns can help bring more attention to the issue. A combination of informed consumers and stronger privacy laws can create a fairer marketplace for everyone.