Companies use this sneaky pricing trick to overcharge you. One lawmaker wants it banned
This practice, known as 'surveillance pricing,' has become more common in recent years, with more companies embracing artificial intelligence as a tool to make real-time price changes for individual customers. However, a new bill aims to stop these companies in their tracks.
Representative Greg Casar introduced the 'Stop AI Price Gouging and Wage Fixing Act of 2025' on July 23. While some states—such as California, Colorado, Georgia, and Illinois—have proposed similar bans, Casar's bill is the first at the federal level.
'Giant corporations should not be allowed to jack up your prices or lower your wages using data they got spying on you,' Casar said in a statement. 'Whether you know it or not, you may already be getting ripped off by corporations using your personal data to charge you more. This problem is only going to get worse, and Congress should act before this becomes a full blown crisis.'
How surveillance pricing works
Companies engaging in surveillance pricing use customer data taken from the cookies—text files containing data—or tracking pixels that continue to follow you after leaving their website, providing information on your online activity, preferences, location, and device. This data can then be analyzed by AI programs to help the companies determine a personalized price for their products or services.
The ban would impact the pricing systems of numerous retailers that reportedly engage in the practice, from retailers that increase prices for pickup orders when you are close to a store, to rideshare apps that charge more when your phone battery is low. Similarly, Delta Airlines recently came under fire for plans to expand their use of AI-driven pricing.
'We've seen things like people's browsing history, device type, battery, location, and more, inform pricing that focuses on how much that individual might be willing to pay for something—preying on desperation rather than using fair market pricing,' Ben Winters, director of AI and data privacy at the Consumer Federation of America, told Fast Company. (The Consumer Federation of America is one of several consumer-interest organizations and advocacy groups that have endorsed the proposed bill, according to a statement by Casar's office.)
One of the benefits of the bill, Winters says, is that it would 'draw clear lines in the sand prohibiting the use of AI systems' to apply data-driven pricing on consumers, and provide customers harmed by this practice the right to sue the company behind the AI-driven prices.
'Too few bills focused on AI and data abuse have this key feature,' Winters says. 'It's one of many reasons we support the bill.'
The Federal Trade Commission would be the entity responsible for enforcing the ban against surveillance pricing, which would be treated as a violation of two existing FTC acts regarding 'unfair or deceptive acts or practices' and 'unfair methods of competition,' according to the proposed bill.
Surveillance pricing may be more common than you think
Last year, the Federal Trade Commission launched an investigation into surveillance pricing, hoping learn more about how companies were using personal data to change prices. The initial results, released in January, found that retailers were using everything from demographic and location information, to mouse movements and abandoned online shopping carts, to match prices to consumers.
'Retailers frequently use people's personal information to set targeted, tailored prices for goods and services—from a person's location and demographics, down to their mouse movements on a webpage,' FTC Chair Lina M. Khan said in a statement earlier this year.
The new legislation would not impact higher prices that result from 'reasonable costs' the business takes on to serve different customers, or lower prices from discounts for teachers, veterans, seniors, students, or rewards program members. Lawmakers and advocates that support the bill suggest the ban could make a big difference for consumers struggling to find fair prices amid rising prices and economic uncertainty.
'The ability to compare prices, to rely on consistent prices, and to know why a price is being charged—this is what gives us the power to know if we are getting a fair deal,' Nidhi Hegde, executive director at the American Economic Liberties Project, said in a statement. 'Surveillance pricing destroys the social contract of the marketplace.'
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