Surveillance Pricers, Elizabeth Warren Is Coming for You
Part of the reason we know so much about the use of digital surveillance and algorithmic pricing and how much it costs families is that Groundwork has been investigating companies and publishing its findings. Primarily driven through apps, algorithmic pricing uses information gathered on consumers, posing privacy concerns and undermining transparency in pricing. A year ago, Groundwork released a report showing that Instacart, the grocery shopping app, charged customers wildly different prices based on who was shopping. The average cost swings could add up to $1,200 per family per year, the report found. Instacart stopped its pricing tests after the report generated outrage.
Of course, it’s not just Instacart. Warren joined progressive representatives to demand answers on McDonald’s use of AI pricing, and the Federal Trade Commission targeted nine companies—Delta, United, JetBlue, Lyft, Uber, DoorDash, Instacart, Target, and Walmart—in an investigation launched in October. In addition to costing customers more, regulators think algorithms might provide opportunities for collusion that violates antitrust rules. A 2023 antitrust lawsuit against Realpage, a real estate tool used by landlords to set rents, was just settled with $360 million awarded to the impacted renters. Many states are already working to ban such practices, and Missouri Senator Josh Hawley, a Republican, is among those who have called for federal legislation.
But investigations and hearings could accomplish a lot on their own. Democrats are reviewing plans from Groundwork to investigate corporations using their new platform as the majority party, which would give them opportunities to subpoena information and force CEOs to testify. It would also provide the opportunity for members to champion fixes to the cost and wage issues that Americans who live paycheck to paycheck care most about. Owens said the investigations themselves could prompt companies to stop these practices, pointing to the Instacart experience.
