How online retailers are using AI to adjust prices by mining your personal data

If you’re going online to buy some last-minute gifts this holiday season, there’s a chance the price you pay will be influenced by what’s known as “surveillance pricing.” Some retailers are using artificial intelligence to set individualized prices online by sifting through personal data, including age, gender, location and browsing history. Ali Rogin speaks with Jay Stanley at the ACLU for more. John Yang: Today is Super Saturday, the last Saturday before Christmas. It's predicted to be the second busiest shopping day of the year. If you're going online to buy some last minute gifts, there's a chance the price you'll pay will be influenced by what's known as surveillance pricing. That's the practice of some retailers to use the power of AI to sift all sorts of personal data center to set individualized prices online. Things like your age, gender, geographic location and even browsing history could change the price you pay. Ali Rogan spoke with Jay Stanley, senior policy analyst for the Speech Privacy and Technology Project at the ACLU. Ali Rogin: Thank you so much for joining us. So what is surveillance pricing and how does it work? Jay Stanley, Senior Policy Analyst, ACLU: Surveillance pricing is basically when companies gather a huge amount of data about they're individual customers. And we're living in an era where more data is being collected about us than ever before. Companies take that data and they use it to try to figure out basically how to wring more money out of you when you buy things from them. What is your pain point? What are you willing to pay, questions like that. And there's a widespread experimentation happening with that kind of pricing in a number of business sectors today. Ali Rogin: So what are some examples of that? How are these companies using the massive amounts of data that exist about all of us online to give us these I've heard it described as like personalized pricing? Jay Stanley: I mean, right off the bat, there's a lot we don't know because, number one, they're going to claim trade secrets. Number two, they're using AI, which is very opaque in the first place. Even the businesses may not understand what the logic of the AI they're using is. But this first came into public attention when the president of Delta Airlines, speaking to investors, said that they were planning on using AI to set an increasing proportion of their prices, their airline prices, and that they would use personal information about people to do so. That created a bit of an uproar in Congress and elsewhere, and Delta backed off and said, no, no, we're not going to do this. But it really put the issue which has been out there for, you know, 10, 15 years on a low key level, really put it into the headlines recently. And so we're seeing attention by Congress, by state legislatures, by the Federal Trade Commission and others. There was a...

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