Congress tries to outlaw AI that jacks up prices based on what it knows about you Two Democratic members of Congress, Greg Casar (D-TX) and Rashida Tlaib (D-MI,) have introduced legislation in the US House of Representatives to ban the use of AI surveillance to set prices and wages. During Delta's Q2 earnings call last week, Delta's president Glen Hauenstein said that the airline has already rolled out AI- …
This has nothing to do with supply or demand. Supply isn't changing with this, demand isn't changing, they're just trying to get more money out of whoever is willing to pay more.
So Delta and the ride-hailing companies use surveillance pricing. Guess who's going on my "don't do business with" list.
Don't forget more elaborate strategies - like big corporations not paying taxes, the crime goes up, because there is no money for essential services, people spend more time home - doomscroll and then buy more random tat from Amazon and the likes.
Self feeding machine.
Of course at that level, corporations always have brown envelopes ready to be launched at politicians trying to change it.
Perhaps the sentence should end there.
Corporations gets privileges because of their public utility There's a debate to be had about what constitutes "giant", but once corporations are in a position to make decisions about our lives that we wouldn't permit a government to make, then their public utility is only visible in the rear view mirror.
It's basically company scrip with extra steps - the plan is to leave you with at most zero money
The most frustrating part is how short sighted it is. It manages to make such a comfortable way of life obviously and imminently unsustainable. We could all live like medieval kings but some MBAs have decided to give us civil unrest instead
Assuming there aren't a flood of discrimination* cases based on personal pricing (personal gouge rating?) happening, price comparison sites will need to become interactive and offer an escrow service. The best price for $item$ get ordered via 'someone' else signed up to the comparison service. This should not invalidate consumer rights as it's still a person (even if you personally don't know them) placing the order automagically via the service.
To make purchasing flights transparent, airlines will have to be required to publish (literally) 'the next seat on flight 123 will cost £xxx', easily monitored for compliance. Interesting legislation will be needed to prevent personal pricing being included in services such as insurance.
* AI has form for this already
It's one thing to charge more money based on actual supply & demand but once you start charging based on "personal characteristics" you have entered into a very grey, possibly illegal realm. The Robinson-Patman Act comes to mind. Not that I would expect the current administration to enforce it.
The AI bit is irrelevant. It merely makes this probably a bit quicker (and more prone to error if other articles on this site about AI are anything to go by). The real issue is that it prevents consumers making an informed choice, which is essential for any defence of capitalism in a democracy.
It is not merely that prices are varied in real time based on both demand and who is buying, nor that the people providing the services (e.g., Uber drivers) are also not receiving the extra, but that this is done secretly. People are not allowed to see what others are charged or paid, presumably because there would be uproar and the companies would be the first news item on the main bulletins for days. EDS used to have a contract clause that made it a dismissible offence to tell a colleague how much you were paid. This seems like a logical extension of their attitude towards customers and staff.
(Where's the 'Capitalist Pig' icon when you need it?)
> The AI bit is irrelevant. It merely makes this probably a bit quicker (and more
costly once the AI hypesters (and their supply chain) start charging realistic prices to their clients, instead of, oooh, running on debt financing of their GPU farms.
But don't worry, the corporations will just pass their sudden increase in costs onto the consumer (except those who con government into "bailing them out of this crisis that nobody could have foreseen").
But if you take away the AI part, isn't this done all freaking time? Okay, maybe not so much in the consumer world, but in business to business kind of industries. Like anything where you see "request a quote" instead of a price list. Having worked in that kind of field a little bit, I don't for a minute believe the price quote you get depends solely on material and labor costs.
In some cases it's probably based on part availability. Look at the rebuilding (sorry, "remanufacturing") of digital hardware that is no longer available new. How many do we have that are ready to go? How many need work but we know what they need? If we have to dip into the "busted and don't know how" bin, they'll take more time and therefore money.
It's been happening on some websites for years: different prices for the same services (flights, hotels. etc.) may be quoted depending on where you ip address can be localised to. American Airlines, Delta and United have all toyed with charging more per seat for individual bookings, than for multiples. The only remedy is to ensure sufficient competition in the relevant sectors, but the US has a terrible reputation for this, not least due to the excessive politicisation of the regulators, but also the revolving door problem. I mean, why not put someone who used to work at a hedge fund in charge of the SEC? Or an ex-Boeing manager of the FAA? What could prossibly go wrong?
the revolving door problem. I mean, why not put someone who used to work at a hedge fund in charge of the SEC? Or an ex-Boeing manager of the FAA? What could prossibly go wrong?.
It is not just the regulators. Check out the current US Cabinet, as appointed by President Trump. Of the 26 of them, not one has a degree in science or mathematics. One, Brooke Rollins, has a degree in 'Agricultural Development' from Texas A&M, and one other, Chris Wright, a degree in Mechanical Engineering, followed by a Masters from MIT in Electrical Engineering. The rest seem either to be lawyers or 'business' people. Of course, having a degree in US History and Literature does not actually disqualify you from running US health care (RFK Jr.) but it would be nice if someone allegedly advising the President knew some actual 'hard' science.
"What could possible go wrong indeed?"
https://en.wikipedia.org/wiki/Cabinet_of_the_United_States
Where did congress get this silly idea that it could do that?
Congress will bloody well learn its place and stop trying to add any hurdles - however small they may be - to the operations of its masters/owners.
Sounds like congress needs a good talking down to by its masters and I'm sure it'll get it in the near future.
</cynical>
Note that the bill is moved by two Democrats and no Republicans. That alone is probably enough to ensure it will go nowhere, so the paymasters may not feel they have to break cover for this.
Here in NZ I am quite confident that this would fall very foul of data protection laws. I am, however, much less confident that those laws will be appropriately enforced.
And avoid the Big Corp Supermarkets with their ePaper price tickets.
At least you'll be able to spot when your local shopkeeper is running ahead of you, swapping paper tickets on the shelves, after he spots the platinum card peeking out of your wallet.
"At least you'll be able to spot when your local shopkeeper is running ahead of you, swapping paper tickets on the shelves, after he spots the platinum card peeking out of your wallet."
Always paying with cash means the shopkeeper has no idea who you are and has no way to jack up prices based on what you CAN pay. If you want to pay more, go to Whole Paycheck market and browse the "organic" selections.
The real worrying part is some stores now have electronic pricing displays on the shelves, so AI could identify you and change the price you see and change it again for the "poor" person behind you. I've not seen it in my shop, but I imagine its coming.
The extra threat here is the expansion of when this happens. Anything with a custom quote like plumbing or building work has a “what will this person pay?” approach to pricing. Multiple quotes can mitigate that to some degree.
The approach moving to “anything you buy on the Internet” is a big change.
If a company is using an older, less advanced AI, they'll be fine.
I'm self-employed so what I get paid is what I charge customers. I've spent time sorting out what I need to charge with some input from what other's charge for the same sort of work and that's it. Just about everybody pays the same with a few getting my best pricing for doing more business with me and for how long they've been a client.
When I buy things, I try to keep the process at an arm's length. The other side doesn't know who I am until we've agreed on a sale. Many big ticket items are still advertised at a price so if a vendor hit me with a premium quote thinking I'm a fat target or desperate, they'd be very wrong to even try it.
In a B2B environment, maybe price fixing could happen, but I just don't see it for somebody such as me that isn't shopping online and subject to prices being set based on who I am.
Wages are another issue. If I ever was to work for somebody else again, I'd have a salary figure in my head going into any negotiation. If the company was advertising a bracket lower than my figure, I'd not apply or make sure they'd entertain a higher wage to get me to the interview table. I do get push back from people when I sent out a quote they don't like, With place like Los Angeles looking to make $35/hr the minimum wage for hospitality workers (hotel maids), I'm not that keen to bring decades of experience and thousands of dollars of tools to a job for $17.50/hr after taxes. I've been super busy for the last couple of weeks at $50/hr. (btw, I charge by the job, not by the hour).
In places where produce is bought from vendors on the street setting a different price for each customer, discrimination based on how you look and talk is common. This contradicts the ideal of equal opportunity for every person independent of age, race, ethnicity, religion and gender. If an AI does the same thing online, the result is the same except at a much wider scale.
From what I can tell the use of personal information to guage how much value a buyer places on an item is likely equivalent to the outcome of a VCG auction for a divisible good. Each buyer pays a different price so that their respective marginal valuations at the transacted quantities are the same. Thus, someone with greater need is charged more.
This optimises the value of the market; however, common sense says people are being charged unfairly. At the corporate level it's been happening for a long time. That's why corporations have purchasing departments. With AI the same value-optimised pricing can be implemented at an individual level.
From a political perspective the result is similar to "tax the rich" but with an unpredictable AI-identified category in place of rich. Ethically it's wrong to "do bad things" to any identifiable group.
There is a hotel chain which I use occasionally which uses "dynamic pricing".
A few years ago I was looking at booking a stay for work when I was interrupted for an hour or so by a phone call during which the website timed me out. Logging back in I found that the room price had gone up by 25%.
I then opened the same hotel website in a private browser window and re-input the same hotel stay, which lo and behold, had gone down to the original price.
If I need to stay with this chain again, I now always use a private window.
Insurance companies look at your postcode/zip code, vehicle value and occupation to determine how wealthy you are.
They also increase quotes if you add optional extras to the quote. As an example, if you’re buying car insurance and you add breakdown cover or legal cover they will inflate the quote.
...adjusting prices based on factors such as browser type, device used, location, shopping history, and inferred personal characteristics, including wealth...
Breaking news: All travel agencies massively move to the Bronx and switch to Compaqs running Windows XP with Netscape. We'll update when we know more.
More: The travel agencies have now noticed that they only need a VPN with an endpoint in the Bronx, and a suitable agent string.
So, er, yes. This strategy by BigCorp seems to be assuming that consumers won't try to game the system and no-one will write software to help them automate that. That might be true if they don't push their luck.
Sounds like you go to the public library (in the poorest town near you, if you have a choice) to use their computer to research airline prices. Use a debit card with a smallish amount of money and no overdraft protection (to avoid getting spurious charges on it in case of keystroke logging and such) on it to book your flight. Would that stymie the pricing model?
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2025
