The discounts, promotions and offers you receive from businesses from Starbucks to Kroger to Target to Home Depot are all too often targeted calculations about what to charge you, built from data including your location, browsing history and social media activities. This information can be used to build hidden profiles of customers’ intelligence, abilities and preferences, which can signal how much you are willing to pay for any given item or service. When you are presented with a deal, you may not have realized that algorithms have already invisibly sized you up with the goal of squeezing your wallet.
This is a part of the commercial surveillance business model. Over the past decade, companies built up infrastructure to harness vast amounts of consumer data, using it to target individuals with unfair price hikes. Now, the concept of a price is itself degraded. Left in its place are numbers engineered for individual consumers, based not on market conditions but on the weaponization of your personal data. Policymakers should mandate that companies offer a real price — one that must be simple, public, accessible and consistent in a given market, with rules on discounts and loyalty programs to promote fairness and protect consumers and competition. No more targeted price adjustments based on surveillance. No more hidden costs or fees. No more prices that change on the fly.
Some argue that targeting and personalization are simply how modern discounts work, a natural evolution of coupons. But there is a meaningful difference between a public offer and a surveillance-driven one. The Sunday circular goes to everyone in the neighborhood: The terms are visible, the discount is available to anyone who clips it, and consumers know what they’re signing up for. Surveillance pricing works in reverse. Companies collect data, infer your willingness to pay and set a price, without you ever knowing your neighbor was charged less for the same thing. One rewards a consumer’s action; the other exploits a consumer’s profile.
In 2022, Target settled a case brought by multiple California counties accusing the company of advertising one price on the website or app outside of the store and then changing the price once customers were in the store. When a traveler is looking for flights or accommodations, sites can show different prices based on the customer’s location — higher for those searching from, say, the San Francisco Bay Area, lower for Phoenix or Kansas City. Last year, when a former Washington Post reporter requested data Starbucks held about him, he noticed that the more he visited the coffee company, the fewer discounts he received. But The Post may have a similar problem. One recent class-action suit alleged that The Washington Post used readers’ demographic and user data to build detailed profiles, charging more for its most loyal customers. (The Post has not publicly responded to the suit.)
Should governments choose to use them, regulators already have some tools to address nefarious pricing practices. Existing consumer protection and privacy laws have a role to play, and anti-competitive practices — like dominant online marketplaces favoring their own products, price fixing by algorithms and manipulating search results — can be addressed through antitrust enforcement. Yet existing laws will take us only so far, and disclosure alone won’t fix the harms. As a former chief technologist at the Federal Trade Commission, I’ve worked on enforcing laws against companies that build their success on skulduggery. Our work targeting surveillance pricing and bringing cases against numerous data brokers for predatory collection and data abuses, while helpful, could not end these practices alone. A real price law would help.
Lawmakers can ensure that the genuine base price is a ceiling, not a prohibition on discounts offered to all customers or loyalty programs that do not exploit customers’ data. Real pricing would target loyalty programs that have all too often become data-extraction mechanisms, where companies take vast quantities of personal information and give consumers benefits that may or may not be genuine. Advertised as money savers, these programs can actually lead to higher fees, reduced benefits, coercive upselling and barriers to exit.
Critics will say similar pricing laws will kill discounts, loyalty programs and happy hours. They won’t. A law protecting standardized pricing would prohibit charging anyone above the genuine base price, and would not prohibit discounts below it. It would ensure that true discounts and loyalty programs are protected — and not undermined by programs that take advantage of consumers. An effective law would also preserve transparent exceptions for discounts aimed at groups like veterans, seniors, students and teachers, allowing special pricing for those who depend on discounts, without permitting legislative loopholes for predatory pricing.
Colorado has shown how state regulators could act by clarifying relevant state privacy laws with loyalty provisions to ensure they benefit consumers. Lawmakers should also ban the sale and sharing of certain sensitive consumer data and prohibit its use to build profiles that determine prices. Federal policy should address the full surveillance data supply chain, from retailers to data brokers, and hold each player accountable when those practices harm consumers. The last vital step is creating private rights of action. When consumers are harmed by corporate wrongdoing — whether through hidden fees, breaches of privacy or discriminatory pricing — they should be able to sue, and not be confined to arbitration agreements that benefit companies. That would create a distributed enforcement network that could help professional regulators crack down on malefactors.
Mandating a real price will ultimately also help companies become healthier. Smaller companies cannot compete on a level playing field when billion-dollar tech companies can build surveillance systems that raise barriers to entry and make it harder for new competitors to enter the market. Forcing companies to drop the surveillance and focus on making good products that people want to buy and selling them for fair, honest prices is not a punishment. Regulation is not a distortion of the free market. It is a way to make it fairer.
Fortunately, surveillance pricing is drawing criticism from both sides of the aisle. “We need national safeguards,” Senator Richard Blumenthal of Connecticut, a Democrat, said at a hearing he and a Republican colleague, Senator Josh Hawley of Missouri, recently held on surveillance pricing. “It’s working people who are going to be paying more,” Mr. Hawley noted, “because the whole point here is to maximize the profit of these already wildly profitable corporations.”
The search for a good deal has become a digital slot machine consumers can’t walk away from. Policymakers owe American consumers better. Establishing a real price law and regulating surveillance pricing and discounts would restore basic principles of the marketplace — where consumers can see the real price, reasonably compare their options and know when a “deal” is really a deal.
Stephanie T. Nguyen served as chief technologist of the Federal Trade Commission from 2022 to 2025. She is currently a senior fellow at Columbia Law School’s Center for Law and the Economy.
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