Surveillance Pricing and AI Algorithms

The investigation into surveillance pricing focuses on how companies use artificial intelligence to set different prices for the same products based on consumer data. The Federal Trade Commission (FTC) is examining this practice, which has gained attention due to cases like that of Starbucks, where a reporter discovered she didn't receive a promotional offer due to AI algorithms determining her purchasing likelihood. These algorithms analyze not only individual shopping habits but also the behaviors of similar consumers to customize offers, ultimately leading to price discrimination. This situation highlights the complexity of AI-driven pricing strategies, raising concerns about transparency and fairness in consumer treatment.