Local Assemblyman working to minimize surveillance pricing, while new FTC chairman blocks public comments
By G. A. McNeeley
March 5, 2025 (San Diego) -- Most people might not know that companies with an online presence are using personal information about customer’s buying habits to charge them a higher price for products, if they think you’re likely to pay it. This is a practice known as “surveillance pricing.”
This practice has spread in recent years, according to consumer and privacy watchdogs, and it’s become increasingly difficult to escape, no matter how often we clear our cookies or tighten our privacy settings.
But with the new Federal Trade Commission (FTC) Chairman blocking consumer comments and not taking action at a national level, state legislators are stepping up to the plate.
San Diego Assemblyman Introduces Bill To Prohibit Surveillance Pricing
Assemblymember Chris Ward (D-78) from San Diego told KPBS, “What we have found is a growing body of evidence where companies are being encouraged to use surveillance pricing, using your own personal data from your cell phone, from the IP address attached to your home computer, to modulate the pricing on goods and services that you pay.”
“That runs completely afoul to what we believe should be a direct, very basic consumer interest that you should pay the same price for the same product, regardless of who you are,” Ward adds.
Ward has introduced AB-446 (2025-2026 Legislative Session), to prohibit surveillance pricing in California.
“At a time when prices for basic necessities are rising across the board, it is more critical than ever to ensure that people are not being unfairly charged higher prices due to their actual or perceived characteristics,” said Ward, in a press release. “The right to fair pricing should not be a privilege for the few but a fundamental protection for all. One product, one price.”
Ward pointed out that price discrimination can prey on people in poorer neighborhoods.
“If they are farther away from some stores and it’s a lot harder to get certain products, companies know this and they are increasing the prices for some products at those very stores because you don’t have as many options,” Ward told KPBS.
Ward’s staff said his assembly bill, AB-446, will soon be heard by the California Assembly’s privacy committee.
Other California Lawmakers Are In Agreement
In many cases, surveillance pricing is legal, but some California lawmakers want to change that.
“You walk into a grocery store, you’re surveilled,” Kristin Heidelbach told KQED. Heidelbach is the Legislative Director for United Food & Commercial Workers Western States Council, which is backing AB-446, which “would prohibit a person from setting a price offered to a consumer-based, in whole or in part, upon personally identifiable information, as defined, gathered through an electronic surveillance technology, as defined, including electronic shelving labels.”
“They have all the tools they need to track you from the time you walk inside the grocery store,” Heidelbach added. “Then retailers take those data points, and they will adjust the price… while you’re standing in a store. They can track on your phone how many times you’ve looked up something. You go to pick up a gallon of milk, and it’s one price, and then by the time you get up to the front, the price has already fluctuated.”
California already has some protections in place in the form of The California Consumer Privacy Act, which limits the amount of information that businesses can collect and use to make decisions about consumers. “But, more can be done,” Maureen Mahoney, Deputy Director of Policy & Legislation for the California Privacy Protection Agency, wrote in an email to KQED.
“Consumers shouldn’t have to worry that where they live or how they browse a store will be used to determine how much they pay for important purchases,” Mahoney added, in her email.
State Senator Aisha Wahab has introduced a couple of bills (SB-384 and SB-259) that would restrict companies from using algorithms for dynamic pricing. She said she expects pushback from a variety of industries, and not just in Silicon Valley, as dynamic pricing has become a big money maker.
“But I have always seen my job as a policymaker is to put safeguards there to protect the average person,” Wahab told KQED.
With an established history of leading in the consumer privacy space, California lawmakers are joining those in other states like Colorado, Georgia, and Illinois to pick up where federal regulators are expected to leave off.
FTC Publishes Surveillance Pricing Report
The Federal Trade Commission (FTC) issued its preliminary “surveillance pricing” report, which examined the hidden techniques companies can use when determining how much to charge particular individuals.
The FTC found that retailers use data such as scrolling habits, purchase history, and location in charging people different prices for the same product. Even how long we take to respond and engage with emails is tracked and incorporated into pricing.
The variables used by companies include, “where the consumer is, who the consumer is, what the consumer is doing, and prior actions a consumer has taken, such as clicking on a specific button or element on webpage, watching a video, or adding a particular item to their cart or wish list,” said the FTC study.
According to the report, companies could collect “real-time information about a person’s browsing and transaction history,” and then decide whether to offer coupons based on assumptions derived from that data.
The FTC’s report also cited how corporate consultants have been pushing for surveillance pricing. “Personalized pricing strategies, once considered a futuristic concept, have become a cornerstone of modern business strategy,” said the Cortado Group.
The FTC study is only preliminary, and doesn’t state whether the pricing is illegal or not.
New FTC Chairman Cancels Request For Public Comments
When the FTC initially published the report, it sought input from consumers and businesses about how surveillance pricing had affected them. After President Donald Trump took office, new FTC chairman Andrew Ferguson canceled the agency’s request for public comments to continue the inquiry.
Ferguson and Commissioner Melissa Holyoak dissented from the decision to release the report, arguing that it was premature.
“The Commission should allow staff to do its work and issue a final, fact-based report, rather than rush to meet a nakedly political deadline to present something, anything, to the public,” they stated last week.
Ferguson, the new Trump appointed FTC chairman, is a Big Law alumni who defended large companies from antitrust cases and opposed consumer gains such as the commission’s non-compete ban. He opposed releasing the pricing study, and one of the first things he did as chairman was to shut down public comments for it. So it looks like this might be the end of the FTC looking into surveillance pricing.
Commissioner Alvaro Bedoya called attention in a statement to Ferguson's move, writing that one of his first acts as agency head was “to quietly remove the opportunity for the public to comment” on surveillance pricing.
It’s too early in California’s legislative session to determine which prospective measures will succeed in making it to Governor Gavin Newsom’s desk. It’s common practice for lawmakers to change a measure’s language substantially as it moves through committees with the help of other lawmakers, lobbyists, and privacy and consumer advocates.
But the study said there is much more work to do. This means it is up to states like California to continue the work the FTC started, in the form of legislation, advocacy and legal action, as the study only presents a sliver of information the FTC hopes to acquire. As the study says, there is a lot they still don’t know about how surveillance pricing works.
Sources:
https://www.kqed.org/news/12028137/california-lawmakers-take-on-predatory-surveillance-pricing
https://consumerwatchdog.org/privacy/surveillance-pricing-is-up-to-us-now/
https://www.ftc.gov/system/files/ftc_gov/pdf/bedoya-statement-emergency-motion.pdf