Surveillance pricing is "evil and sinister," explains Justin Kloczko

Insurance pricing in America makes a lot of sense so long as you’re one of the insurance companies. Drivers are charged more for traveling long distances, having low credit, owning a two-seater instead of a four, being on the receiving end of a car crash, and—increasingly—for any number of non-determinative data points that insurance companies use to assume higher risk.

It’s a pricing model that most people find distasteful, but it’s also a pricing model that could become the norm if companies across the world begin implementing something called “surveillance pricing.”

Surveillance pricing is the term used to describe companies charging people different prices for the exact same goods. That 50-inch TV could be $800 for one person and $700 for someone else, even though the same model was bought from the same retail location on the exact same day. Or, airline tickets could be more expensive because they were purchased from a more expensive device—like a Mac laptop—and the company selling the airline ticket has decided that people with pricier computers can afford pricier tickets.

Surveillance pricing is only possible because companies can collect enormous arrays of data about their consumers and then use that data to charge individual prices. A test prep company was once caught charging customers more if they lived in a neighborhood with a higher concentration of Asians, and a retail company was caught charging customers more if they were looking at prices on the company’s app while physically located in a store’s parking lot.

This matter of data privacy isn’t some invisible invasion online, and it isn’t some esoteric framework of ad targeting, this is you paying the most that a company believes you will, for everything you buy.

And it’s happening right now.

Today, on the Lock and Code podcast with host David Ruiz, we speak with Consumer Watchdog Tech Privacy Advocate Justin Kloczko about where surveillance pricing is happening, what data is being used to determine prices, and why the practice is so nefarious. 

“It’s not like we’re all walking into a Starbucks and we’re seeing 12 different prices for a venti mocha latte,” said Kloczko, who recently authored a report on the same subject. “If that were the case, it’d be mayhem. There’d be a revolution.”

Instead, Kloczko said:

“Because we’re all buried in our own devices—and this is really happening on e-commerce websites and online, on your iPad on your phone—you’re kind of siloed in your own world, and companies can get away with this.”

Tune in today.

You can also find us on Apple Podcasts, Spotify, and whatever preferred podcast platform you use.

For all our cybersecurity coverage, visit Malwarebytes Labs at malwarebytes.com/blog.

Show notes and credits:

Intro Music: “Spellbound” by Kevin MacLeod (incompetech.com)

Licensed under Creative Commons: By Attribution 4.0 License

http://creativecommons.org/licenses/by/4.0/

Outro Music: “Good God” by Wowa (unminus.com)

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