From rent to groceries to that new tv ... welcome to surveillance pricing.

What is "surveillance pricing?" It's a business tactic and its goal is to come up with the highest online price you would willingly pay for an item. It uses AI and the information on your devices to create and offer you targeted, individual internet pricing for rent, travel, groceries, cars and other goods.

Unlike other pricing based on real time supply and demand, surveillance pricing takes data from your devices and manipulates it using Artificial Intelligence. An algorithm creates the price to be displayed by using information gathered from your device which may include a number of factors like your address, the device's manufacturer, remaining battery, websites you visited and registering for loyalty programs or discounts with certain businesses. 

How widespread is it? 

On Jan. 6, Adobe Analytics issued its statistics on the 2025 holiday shopping season reporting, "... a new record for e-commerce... Generative AI tools drove a 693.4% increase in traffic to retail sites. Consumers spent $257.8 billion online." And perhaps not surprisingly, "Mobile shopping hit a new milestone, with the majority of online transactions taking place through a smartphone this season." 

An investigation by Consumer Reports released Dec. 9 found, "Many U.S. shoppers who order grocery deliveries through Instacart are unknowingly part of widespread AI-enabled experiments that price identical products differently from one customer to the next—sometimes by as much as 23 percent ... found to be occurring through the platform at several of the nation’s biggest grocery retailers, including Albertsons, Costco, Kroger, Safeway, Sprouts Farmers Market, and Target."

Consumer Reports' calculations showed, "Based on how much Instacart says the typical household of four spends on groceries, the average price variations observed could translate into a cost swing of about $1,200 per year."

A December 2024 article on "Surveillance Price Gouging" in Consumer Watchdog reported Target shoppers who were checking their device for tv prices in a Target parking lot were shown a price that was $100 more than shoppers who were checking from another location. The report continued, "Orbitz learned that Mac users spend more money to stay at hotels and charged them more than non-Mac users."

And a November 2024 Snopes article offers this example: "Historically, Uber has denied claims that it uses consumers' private data to set fares; however, in 2016, the head of economic research at Uber, Keith Chen, stated that one of the strongest predictors of customers' willingness to pay for increased fares was the amount of battery left on a device. More recent research has shown that Uber's prices increase when a device has low battery — suggesting that Uber preys upon the perceived desperation of their customers."

Learning all this, it was time to test claims of individual pricing with an experiment. Two very savvy technologists from Gudroe Technology Group, Dinyo Dimov and owner Darrell Gudroe joined me. Darrell and I were in the Boothbay area and Dinyo was in Europe.

At 9 a.m. one recent weekday we started a conference call and logged into the American Airlines website from our locations. Using different devices, we searched for the airfare for a specific flight from Boston to Florida. There was no difference in the price shown. But when we checked other websites, there were differences in the prices we saw and in many instances the price was lower than the price on the AA website.

As Gudroe and Dimov summarized in an email after our experiment, "We tested with multiple phones, tablets, and PCs and were able to access different pricing, but there are still too many variables to come up with a conclusive 'best method' for getting the lowest pricing." During a follow-up phone discussion, we agreed that some of the variables that may make a difference in the price are the history of websites visited and the browser used.

Federal and state lawmakers and the FTC are seriously looking into how to curtail surveillance pricing and most of the proposed or enacted laws require consumer notification. They call for a disclaimer to be displayed on the screen saying that an algorithm has been used to determine the price.

In October, New York became the first state to amend its antitrust law to prohibit landlords and property owners from fixing the prices of rental properties and reducing competition using algorithms that shared data in a practice known as "algorithmic price fixing."

One month later, RealPage settled a DOJ antitrust case prohibiting the use of consumers' data in an algorithm that used consumers' confidential information and shared by some property owners to raise rents. A DOJ spokesperson commented on the agreement saying that rents should be set by the market "and not by secret algorithm.”

Consumer Reports announced in August 2025, "By July of the 2025 legislative session, there were 13 bills targeting surveillance pricing. Common provisions include prohibitions on using personal data for setting individualized prices, or requirements for clear consumer disclosures when such algorithms are used."

 Does charging each consumer a different price violate the law?

 Consulting the Maine Consumer Law Guide, even the purchase of a can of soup is a contract between the buyer and the seller. But traditionally, courts have deemed that some contracts are not enforceable - like ones in which the buyer is misled into agreeing because the seller didn't disclose a fact that would cause the buyer to refuse the deal.

And some contracts are outright violations of consumer law because, "A merchant’s sales technique was so deceptive or the contract was so unfair as to be in violation of the Maine Unfair Trade Practices Act."

Two recent bills in Maine proposed bans on "dynamic pricing" by restaurants or grocery stores.  As described in one bill's summary, it is "...causing a price for a good or a product to fluctuate based upon demand, the weather, consumer data or other similar factors including an artificial intelligence-enabled pricing adjustment." Both bills excluded the price of seafood. While both would have made dynamic pricing an unfair trade practice under Maine law, they were voted "ought not to pass" in committee.

What does it all mean to consumers? Keep an eye on proposed laws coming to the Legislature to make sure that your voice is heard. Clear the browsing history on your device. Check and double check prices quoted to you on the internet. And you might want to try using various devices and browsers as you search for a price online.

Jane Carpenter is the author of identity theft and data breach reference manuals for law enforcement and is a member of the FBI-sponsored InfraGard organization.