Pluralistic: The stupidest imaginable excuses for surveillance pricing (30 Jul 2026)


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The stupidest imaginable excuses for surveillance pricing (permalink)

With "surveillance pricing," businesses have finally found something AI can do way, way, way better than people: price gouging.

As the name suggests, "surveillance pricing" is the practice of charging every customer a different price for every transaction, based on the massive surveillance dossiers that Big Tech companies and data-brokers have assembled on everyone in the world. Congress hasn't updated federal consumer privacy law since 1988 (when they passed a law banning the disclosure of VHS rentals), so pretty much any form of consumer surveillance is fair game.

This is where the AI comes in. One thing AI is indisputably great for is multivariate statistical analysis. You can feed an AI "behavioral data" (information about where you go, what you do, what you buy, who you talk to and what you say) about all of your customers and ask it to cluster them according to their shared traits. Then you can direct the AI to automatically run a series of small experiments to discover the maximum markup each group will stomach under which circumstances.

This works without you having to direct the AI to rip off certain groups of people – it will simply find the most vulnerable people and rip them off the most. If you're hiring in an industry that practices a lot of tacit racial discrimination, a system like this can figure out on its own that people of color typically accept lower wages because there are fewer employers bidding for their labor, and recommend lowball salary offers, all without you ever typing "please be racist" into your AI prompt.

This works so well that Google has announced that it is their plan for making a profit off of AI, after losing hundreds of billions of dollars on chatbots:

https://pluralistic.net/2026/01/21/cod-marxism/#wannamaker-slain

In the before times, marketers and demographers had to dream up demographic categories based on limited data and run focus groups to figure out how to maximize revenue from each market segment. Now an AI can segment the data to any degree you choose, and continuously, automatically experiment on each segment to find their weak spots.

It's "theory-free." You don't have to discover why a group is willing to pay more under a given set of circumstances, you merely have to observe and weaponize this fact. You don't have to know why one group of purchasers consistently accept higher prices between 6AM and 8AM – you can just automatically jack up prices on them without knowing or caring that you're gouging parents of young children who are re-ordering essential supplies while trying to get their kids to school in the morning.

I thought up that example. I don't know if it's really happening. But here's something that really is happening: ecommerce sites charge parents of newborns extra when they order thermometers in the middle of the night. I'm not saying that anyone ever sat down and said, "Parents with sick children will pay whatever we charge for a thermometer at 2AM." They didn't have to: this is the kind of thing an automated system can do without any human intervention:

https://www.ftc.gov/system/files/ftc_gov/pdf/p246202_surveillancepricing6bstudy_researchsummaries_redacted.pdf

The goal of surveillance pricing is to shift all the "consumer surplus" (the difference between the highest price you're willing to pay and the price you actually pay) to companies. It's a form of cod-Marxism where you are gouged according to your ability (to pay) and charged according to the desperation of your need:

https://pluralistic.net/2025/01/11/socialism-for-the-wealthy/#rugged-individualism-for-the-poor

The problems of surveillance pricing are well documented. Under Biden, the FTC did a landmark study on the practice, developing a rich factual record that documents the role surveillance pricing plays in the affordability crisis:

https://pluralistic.net/2024/07/24/gouging-the-all-seeing-eye/#i-spy

Companies are already using this technology to rip you off, and they're slavering for the chance to do more of it. Instacart was recently caught marking up some shoppers' items by as much as a third:

https://pluralistic.net/2025/12/11/nothing-personal/#instacartography

The problem is that as much as companies love this, shoppers hate it. Last summer, Delta announced that it was going to surveillance price every seat on every flight, only to face such a massive backlash that they had to make another announcement bemoaning the fact that we'd all misunderstood their (unambiguous and extremely damning) announcement and they were actually going to do no such thing:

https://pluralistic.net/2025/07/30/efficiency-washing/#medallion-clubbed

One thing the Mamdani campaign impressed upon every politician in the country is that people are pissed about affordability and they will support anyone who stands up for the public against AI-equipped price gougers. The problem of course is that those price gougers are highly organized and have deep treasuries (stuffed with money they stole from us). With surveillance pricing, politicians face a familiar conundrum: if they do the thing that's popular with voters, they'll enrage donors.

One way to cut this knot is to enact legislation that seems to address the problem, but stuff it with so many loopholes that it does nothing. This lets you declare yourself the people's champion without doing anything to protect them from the donors who prey on your voters. That's the approach they took in Maryland:

https://pluralistic.net/2026/04/30/something-must-be-done/#there-ive-done-something

But in California, they're actually doing something about surveillance pricing. AB-2564 is a smart, well-written bill that bans surveillance pricing. It contains an easily evaluated test for surveillance pricing and carves out legitimate reasons for offering different prices for the same purchase (for example, when it costs more to deliver the product or service):

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202520260AB2564

Now we're in for the hard yards of turning this bill into a law. That's where California's cities come in. When municipal governments pass resolutions supporting a state bill, it makes it much easier to get that bill through the state legislature (and conversely, without support from major cities, it's that much easier to kill the bill before it becomes law).

A few days ago, the San Francisco Board of Supervisors was on the verge of passing a resolution in support of AB-2564. Now, that vote is stalled, thanks to a letter sent by the San Francisco Chamber of Commerce, an organization that has been pissing in San Franciscans' faces and telling them it was raining since 1850:

https://www.sfexaminer.com/news/community/board-not-yet-ready-to-weigh-in-on-state-surveillance-pricing-ban/article_0ae4d143-cced-4988-abda-0b71bcbe524c.html

The Chamber's letter is – to use a technical term – flaming garbage. It raises the most spurious objections imaginable, claims about the bill's language that are belied by its plain, easily understood text. These objections are demolished in a letter the Electronic Frontier Foundation sent to the Supervisors:

https://www.eff.org/document/letter-sf-bos-re-surveillance

In the letter, EFF explains that claims that surveillance pricing will lower prices are overblown and not borne out by evidence. But more importantly – as EFF points out – privacy is a human right, and the idea that you should have to give up your privacy to get a fair price is just a fancy way of saying that privacy should be the exclusive preserve of people who can afford to pay more:

https://www.eff.org/wp/privacy-first-better-way-address-online-harms#Legislation

EFF's letter goes on to address the Chamber's objections. Far from creating uncertainty about which conduct the bill addresses, AB-2564 crisply defines surveillance pricing as:

a customized price for a good for a specific consumer or group of consumers based, in whole or in part, on personally identifiable information collected through electronic surveillance.

The Chamber raises other tired objections, falsely claiming that banning surveillance pricing will end common discounting strategies like offering seniors cheaper movie tickets, or giving cheaper rates to retain customers who call to cancel their service. EFF replies by pointing out that all the Chamber's concerns are covered by the three comprehensive carve-outs in the bill: the ability to charge higher rates when it costs more to service a given customer; offering discounts to retain customers who want to cancel their service; and finally, discounts for criteria anyone can meet (like an "early bird special"), for membership in a broadly defined group (like "seniors"), or for participation in a loyalty program.

The San Francisco Supervisors could have figured out at a glance that the Chamber was bullshitting them. All it takes is a cursory read of the statute. But now they don't even have to do that: EFF has painstakingly debullshittified the Chamber's FUD.

Surveillance pricing is grossly offensive. When a company charges me $0.50 for a product that it charges you $1 for, they're essentially saying that your dollars are worth half as much as mine are. Companies shouldn't be able to reach into your wallet or your bank account and chop your money in half:

https://pluralistic.net/2025/06/24/price-discrimination/#

No wonder AB-2564 has plenty of backers, from EFF to Consumers Union:

https://advocacy.consumerreports.org/press_release/california-state-assembly-passes-key-bill-to-prohibit-surveillance-pricing/

San Francisco's city government should be on that list of supporters.

(Image: Takkk, CC BY-SA 3.0, modified)

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