Last October, an explosive news report found that Kroger, one of the largest grocery store chains in the United States, was exploring the use of facial recognition technology in its stores.  Immediately, shoppers and public officials worried that consumers’ faces might be used, along with other intimate data, to deliver different prices for different consumers. The story tapped into a deep and understandable fear. 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 based-on data regarding your shopping habits, financial vulnerability, social media activity, or even subtle cues like your body language.

The threat is real. The Federal Trade Commission (FTC) published a first-of its kind report on surveillance pricing last month, which details how corporations can use vast quantities of personal data to set individualized prices for goods and services, exploiting consumers based on their unique vulnerabilities and behaviors.

Corporations collect information about where we go, what we watch, what we like, who we know, what food we buy, what videos our cursors linger over, and what loans we take out. Giant firms can run those data points through algorithms to set individualized prices and wages, rigging the market to charge us as much as possible for goods and services and pay us as little as possible for our work.

This report explains how surveillance prices and wages work; what harms they may cause; and what legal tools are currently available to combat them. It then calls on the states to act decisively and ban these practices outright. To do so, it introduces five core principles to guide future government action.

This report was written in partnership with:

• Zephyr Teachout, Fordham Law Professor and Economic Liberties board member 
• Veena Dubal, Professor of Law, University of California, Irvine
• David Seligman, Executive Director of Towards Justice
• Sarah Myers West, co-Executive Director of the AI Now Institute
• Lindsay Owens, Groundwork Collaborative Executive Director