Owens: “Age-old impulses to nickel-and-dime you or squeeze you or turn a profit have been supercharged by new technologies.”
Earlier this week, Lindsay Owens – President and CEO of Groundwork Collaborative and new author of Gouged: The End of a Fair Price—and What That Means for Your Wallet – joined PSB NewsHour’s economics correspondent, Paul Solman, to peel back the curtain on how companies are using new technology and AI to quietly change the prices consumers see and how much they pay.
Owens explains, “They [companies] might be able to collect your location from where you log on, your I.P. address, if you’re shopping online. They may have detailed information about your purchase history because you shop there regularly, you use a loyalty card, or you log in to an app before you make a purchase. They may be able to ascertain or try to guess demographic information about you.”
Owens has been a leading expert on corporations’ harmful adoption of surveillance pricing and AI pricing tools, putting a spotlight on how they are reinventing the ripoff. An investigation by Groundwork Collaborative, Consumer Reports, and More Perfect Union into Instacart’s pricing experiments found that AI-enabled technology can charge U.S. consumers up to 23% more for the same item ordered from the same store at the same time, which could cost a household of four about $1,200 per year. After facing public backlash and a probe from the FTC, Instacart shut down its pricing lab.
Owens says personalized pricing technology is everywhere. In the NewsHour segment, Owens and Solman ordered a meal on the UberEats app to the same location, finding the fees were not standardized for their identical order. When Solman asked “why shouldn’t a company charge me as much as I’m willing to pay?” Owens responded: “I don’t want to be charged the maximum amount I can pay for every single ingredient when I make a lunch sandwich…Prices in this country used to be more tethered to things like the underlying cost of making the good. Add a fair margin on top, put a sticker on it.”
Owens also sounded the alarm on Walmart’s personalized pricing technology, and their digital price tags — set to be rolled out in all U.S. stores by the end of the year — that allow pricing changes in real time. Walmart felt compelled to respond to Owens and put out an open letter. She then set the record straight with additional research on the company’s own patents — highlighting how they are saying one thing to customers and another to investors.
Recent polling from Groundwork and Data for Progress found that over three-quarters (76%) of Americans said they support a ban on surveillance pricing practice. Until comprehensive legislative measures are taken, Owens suggests consumers compare prices across the brick-and-mortar store, online, and the app, use a VPN, and log in and out of loyalty programs.
MORE FROM OWENS:
On Theo Von’s Podcast: “I think this is all about fairness at its core. This isn’t about economics, this isn’t about technology, this isn’t about public policy. This is about the fact that pricing in this country is unfair now. Like the price tag enabled fairness. It enabled predictability. If you’re on a budget, you need to know how much groceries cost week to week. And if prices are changing minute by minute in the grocery store, that makes budgeting impossible…The lack of predictability in pricing now is making life hard for a lot of us…It does feel unfair.”
On Jon Stewart’s The Weekly Show: “In the book, I’m really focused on the ways in which new technologies have allowed tech companies to supercharge these age-old impulses and reinvent the ripoff. And these days, you can get price fixing across industries and sectors where coordination would be impossible but for the players using a common algorithm.”
On the TODAY Show: “It seemed to me that price hikes were not random anymore, they started to feel rigged … This is coming for every line item in the household budget.”
On Morning Joe: “They’re trying to assess your willingness to pay, and this combines two things that Americans absolutely hate, understandably: being spied on and being ripped off. But this is no longer about the cost of making a good or bringing a good to market. This is about a new corporate credo. The right price is the one that they can get you to fork over.”
In Bloomberg Businessweek: “For 150 years it has been the norm that if you and I were standing in line together, we would pay the same price. But that’s just not true anymore. Even though some of it is legal, it feels deeply unfair.”