Surveillance Pricing Is Making Life More Expensive. Here’s How It Works and What You Can Do

The company’s tweet was deleted, with JetBlue’s team claiming that the post was mistaken and that the carrier didn’t use personal information to set flight prices. But for experts like Owens, it felt like a confession.

JetBlue is now facing a lawsuit for allegedly using what’s called “surveillance pricing.” But it’s not the first time Owens has run into this from an airline. In fact, last year, she said she listened in on a Delta call discussing the carrier’s new partnership with Israel-based AI company Fetcherr, which specializes in personalized pricing.

In Fetcherr’s white paper, “phase two was called ‘the exploitation phase,’” Owens said. “That’s when they’ve learned everything they can about Delta’s competitors, about their customers, and when they start going for broke, and they start increasing those prices and getting better revenues for Delta.”

Delta found itself in a firestorm when details of the partnership went public, leading Delta to later announce it didn’t plan to go through with the strategy. The airline wrote in a public letter to senators inquiring about the program that “there is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized prices based on personal data.”

Consumers are already painfully familiar with the concept of “dynamic pricing,” in which the cost fluctuates based on supply and demand. The most famous example, of course, is concert tickets getting more expensive as seats fill up. It’s even being used to dictate parking meter prices in San Francisco.

But surveillance pricing goes further than that.

“They’re doing anything they can to learn about you, including sometimes spying on you,” Owens said. “Companies gather a lot of data about us. Some of it we offer up willingly: our browsing history. We accept the cookies. We agree to let them sell our data.”

“And all of that can be used to set a price for you specifically,” she said.

KQED’s Close All Tabs podcast spoke to Owens about the world of surveillance pricing, how it shows up in day-to-day shopping, whether it’s even legal in the first place and what customers like you can ultimately do to avoid it.

Where did surveillance pricing even come from?

“The way to think about the advent of surveillance pricing is to start with the advent of surveillance advertising,” Owens said.

She said it started with DoubleClick, a company founded in 1995 that “really pioneered and built the infrastructure for surveillance advertising on the internet.” DoubleClick tracked what you looked at online and, in Owens’ words, “built an advertising system to serve it back to you.”

Users are probably familiar with this concept. Perhaps you looked at an item but didn’t buy it – but then you see it on your feed again and again, until you perhaps finally buy it.

Google eventually purchased DoubleClick in the 2000s, “and Google [was] the advertising king in the early digital era,” Owens said.

As companies get better at knowing what you want, she said that it was a “logical next step” for companies to also figure out how much you might be willing to pay.

“Marrying sort of dynamic pricing with surveillance advertising is how we get to the modern form of surveillance pricing that we’re starting to see today,” Owens said.

What are some examples of surveillance pricing?

Back in 2012, a Wall Street Journal analysis found that Staples determined pricing for customers depending on ZIP code. If the user lived in a ZIP code farther away from a competitor, the price was likely to go up.

Just a few years later, a 2015 investigation by ProPublica, in which the news outlet analyzed prices from The Princeton Review, a test-preparation service for high school students.

“What they determined is that folks in ZIP codes with a larger percentage of Asian Americans were almost twice as likely to be offered that higher price than others,” Owens said. This surge, dubbed “The Tiger Mom Tax” by ProPublica, impacted Asian residents in lower-income ZIP codes as well.

Owens called these “some of the early examples of companies starting to toy around with gauging your desperation.”

In 2022, research conducted in over six different countries by advocacy groups Mozilla Foundation and Consumers International found that dating app Tinder’s personalized pricing algorithm was charging users aged over 30 more money than younger users for its premium Tinder Plus service. In the previous year, the company faced a lawsuit in California over this pricing structure.

Rideshare app Uber has also been a common target of surveillance pricing allegations, although the company has consistently denied this. In 2016, on NPR’s podcast Hidden Brain, an economic researcher at Uber said people were likely to pay higher prices if their phone battery was low.

“We absolutely don’t use that to kind of like, push you a higher surge price,” said the researcher, Keith Chen. “But it’s an interesting kind of psychological fact of human behavior.”

However, in 2023, a Belgian newspaper accused Uber of increasing the price of a trip based on the user’s battery percentage, and in 2024, then-Sen. Sherrod Brown of Ohio called for more transparency on pricing from both Uber and Lyft.

And just last year, Washington Post tech columnist Geoffrey Fowler looked into the data collected by his Starbucks loyalty program and said that, in actuality, the more coffee he ordered, the fewer discounts he got.

“My loyalty was working against me,” Fowler said.

What data do companies have on me to determine these prices?

A lot.

Owens said users give up plenty of information, like agreeing to terms and conditions that a user didn’t read, or signing up for a loyalty program.

“They might be connected to your bank account and know when it’s payday,” Owens said. “They might have information about your location. They might have your purchase history, what you buy weekly, what you haven’t bought in a while that you usually buy, and so you’re due for.”

Owens said websites can also track your mouse movements online: What you hover over, how long you hover over it, what you click on, what you put in your cart, but don’t buy.

“They can buy information about you from third parties,” Owens said. “Breadcrumb trails of data you leave when you participate in e-commerce provides a really robust set of data that companies can use to predict how much you’re willing to pay for any given item.”

Where does AI fit into all this?

Another emerging way companies can potentially learn more about a user’s habits is through chatbots and AI agents, which are sometimes used by consumers to help with shopping.

Walmart’s CEO was alleged to have told investors that the company’s chatbot, named Sparky, was nudging consumers to spend more in conversations.

Researchers at Princeton University and the University of Washington tried out comparison shopping on advanced large language models (LLMs) to study how those models would respond. One scenario, for example, was an LLM making a recommendation between two equal products, one affordable and non-sponsored and the other expensive and sponsored.

The option benefiting the user would recommend the affordable, non-sponsored product, while the option benefiting the corporation would recommend the expensive, sponsored product. But according to the paper published in early April, the researchers found that although “frequency varies widely across different LLMs and scenarios,” all current LLMs exhibit “risky behaviors favoring the company over the user.”

While Owens said she thinks chatbots are “really the next big frontier in surveillance pricing,” she added that the good news is that people “aren’t overwhelmingly shopping in AI right now.”

Nonetheless, “it would be great to get this one fixed before the horse is out of the barn, because the future doesn’t look great,” she said.

What can consumers do to limit surveillance pricing?

Owens said she believed in the power of consumer boycotts and taking complaints to social media or a public forum when something seems wrong, like the JetBlue customer did.

Customers can also think about how they “comparison shop.” In the past, “it used to be that you would look at the same item at two different stores, see which store offered you the better price,” Owens said.

But now, “you probably need to comparison shop within stores,” advised Owens, meaning consumers should compare the price of an item on the app, the website and the brick-and-mortar store, then go with the lower price.

Alternatively, customers can ask someone else, like a friend, to log into their account at the same retailer and see which of you gets the better price.

Owens also suggested a browser that offers more privacy protection to limit how much a company can track you. To learn more, KQED has a thorough guide on how to get started on digital hygiene and good privacy practices online.

But ultimately, she emphasized that she did not believe it was the consumer’s job to “try to beat the machine.”

“Shopping against the robot is not a future anybody wants to have,” she said.

“It should be lawmakers’ job and policymakers’ job to make sure markets are fair and honest.”

Is surveillance pricing even legal?

The short answer: Yes. But California has been looking into the issue.

State Attorney General Rob Bonta opened an investigation into surveillance pricing by asking companies in the retail, grocery and hotel sectors to share about how they use personal data.

“Practices like surveillance pricing may undermine consumer trust, unfairly raise prices, and when conducted without proper disclosure or beyond reasonable expectations, may violate California law,” Bonta said in a January statement.

There is also a new law introduced in the state legislature that aims to outright ban the practice, supported by privacy groups like the Electronic Frontier Foundation.

In general, the United States has lagged behind other countries in comprehensive data privacy laws. The Federal Trade Commission, led by Lina Khan during the Biden Administration, released a study on surveillance pricing in January 2025, but under President Trump, “the federal government is not really leading the charge right now,” Owens said.

One way legal action on surveillance pricing might get somewhere, Owens said: with lawmakers tackling surveillance wages, in which companies “can use the exact same tools to learn about their workers and figure out the minimum they’re willing to charge.”

This practice has already been seen to impact workers like nurses and rideshare drivers, and in cases where “algorithmic wage discrimination falls afoul of existing employment discrimination and labor laws,” Owens said there may be opportunities for “enforcement agencies to go ahead and crack down on those practices even without updating the law.”

However, Colorado’s Governor recently vetoed a bill that would ban corporations from using personal data to set individual prices and wages. In New York, the state is enforcing a disclosure law, which requires companies to tell you when a price was set by an algorithm using your data.

Privacy and consumer advocates are monitoring the bill in California closely, Owens said, given the huge implications for the future of surveillance pricing.

“It would be a game changer for a state as large as California, with as many tech companies located in California as there are, to pass a bill like this,” Owens said.