You ever ask the person sitting in 14C how much they paid for their ticket? No? It’s probably because you were raised right, but it also means you won’t know if you’re getting hosed due to personalized pricing (also known as surveillance pricing).
This week, the FTC opened an inquiry into how companies use personal data to set prices for consumers and pay for gig workers. It sent orders to nine companies: Delta, United, JetBlue, Lyft, Uber, DoorDash, Instacart, Target, and Walmart. Each has 45 days to answer. Delta, JetBlue, and Instacart say they don’t use personal data to set individual prices, and Walmart and Target have said the same in recent statements.
Consumer and regulators’ concerns are well-founded. Not only does the sort of profiling that enables surveillance pricing rely on excess data collection, it also is subject to bias. Researchers have already found that dynamic prices in ride-hailing apps unfairly discriminate against certain demographics. The researchers put it best: “When machine learning is applied to social data, the algorithms learn the statistical regularities of the historical injustices and social biases embedded in these data sets.”
If businesses start adopting surveillance pricing wholesale, who’s to say the color of your skin, your gender, your preference for this brand or that, your political party, your health history, or any other data point won’t unfairly paint you as somebody who should be charged more than the guy in 14C?
Best,
Arlo
P.S. Notice anything different about this week’s newsletter? If you like the fresh coat of paint the Privacy Insider got, just wait until you see what osano.com looks like.
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Release Notes: October
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Top Privacy Stories of the Week
FTC Asks Nine Companies How Personal Data Sets Prices and Pay
The FTC ordered Delta, United, JetBlue, Lyft, Uber, DoorDash, Instacart, Target, and Walmart to detail how they use personal data to set prices. It is also examining whether gig workers’ pay depends on data like phone usage or their history of accepting rides and deliveries. The agency says it can seek to compel compliance in federal court. Legislators in at least 30 states have considered pricing-related bills this year, according to the National Conference of State Legislatures.
GM Pays $220M Over Driver Data Sold to Insurers
Washington and Oregon led 36 attorneys general in a $220 million settlement with General Motors over its Smart Driver program. The states allege GM sold identifiable driving data to Verisk and LexisNexis Risk Solutions, which built reports for insurers, despite promising anonymity. They also allege dealership staff were incentivized to enroll drivers, and that an app error told more than 370,000 people they weren’t enrolled while data collection continued. GM didn’t admit liability.
France Fines Fnac Darty €7M Over Unconsented App Tracking
France’s CNIL fined Fnac Darty €7 million, plus €10,000 a day until it complies, over a third-party tracker in its mobile app. The tracker collected browsing history without consent to display product recommendations and train a recommendation algorithm. The regulator reaffirmed that processing personal data for targeted advertising requires consent. The case began with a September 2023 noyb complaint.
California Settles with Lyft Over Buried In-App Opt-Out
California’s attorney general secured a $1.8 million settlement with Lyft, alleging that since mid-2023 it sold or shared riders’ personal information for in-app targeted advertising with no in-app opt-out. Users had to follow links from the privacy policy to a web page, log in again, and hand over more personal information, even though Lyft already knew who they were.
Senators Press Meta on Smart Glasses Privacy
Sens. Ron Wyden and Edward Markey asked Meta CEO Mark Zuckerberg whether the company conducted human rights due diligence and safety testing before release, and what safeguards exist now. Their letter also questions the use of glasses imagery to train AI systems, including with human reviewers. The senators say Meta identified risks to bystanders and vulnerable groups before the 2021 launch and released the product anyway. They’ve asked for answers before Thanksgiving.
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