Dystopian Pricing Tactics Plague Consumers

Lawmakers struggle to address AI-powered price discrimination and other unfair pricing practices

Jan. 29, 2026 at 9:31am

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A new report examines the rise of dystopian pricing tactics enabled by AI and algorithms, including surveillance pricing, dynamic pricing, AI-powered price discrimination, electronic shelf labels, and algorithmic price fixing. These practices undermine consumer ability to comparison shop and facilitate competition, leading to higher prices. Legislators in several states are pursuing various policies to rein in these abusive practices, but crafting effective solutions is challenging.

Why it matters

These pricing tactics, fueled by new technologies, are eroding the basic functioning of a market-based economy. Consumers can no longer rely on transparent, stable prices or the ability to comparison shop, undermining competition and leading to higher costs across the board. Addressing these issues is crucial for protecting consumer interests and maintaining a healthy, competitive marketplace.

The details

Surveillance pricing uses personal data to set individualized prices for consumers. Dynamic pricing constantly shifts prices based on opaque algorithms. AI-powered price discrimination allows platforms to charge different prices for the same goods to different shoppers. Electronic shelf labels enable real-time price changes in physical stores. Algorithmic price fixing enables sellers to coordinate prices through centralized platforms. Legislators in states like Colorado, Illinois, and New York are pursuing various policies to ban, limit or increase transparency around these practices.

  • In 2022, the Federal Trade Commission warned about retailers using consumer data to set individualized prices.
  • Last year, New York adopted a law requiring sellers to disclose when personal data is used to set prices.
  • The New York Attorney General announced an investigation into Instacart's dynamic pricing practices in 2023.

The players

Federal Trade Commission

The federal agency that warned about the use of consumer data for individualized pricing.

New York Attorney General

Announced an investigation into Instacart's dynamic pricing practices.

Instacart

A grocery delivery platform accused of using AI-powered price discrimination to charge different prices for the same items.

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What they’re saying

“Consumer behaviors ranging from mouse movements on a webpage to the type of products that consumers leave unpurchased in an online shopping cart can be tracked and used by retailers to tailor consumer pricing.”

— Federal Trade Commission staff (Federal Trade Commission)

What’s next

Legislators in several states, including Colorado, Illinois, Virginia, Pennsylvania, Tennessee, and Washington, have introduced bills to ban or limit surveillance pricing and other unfair pricing practices. The outcomes of these legislative efforts will be closely watched.

The takeaway

The rise of AI-powered pricing tactics is undermining the basic functioning of a market economy, with consumers unable to rely on transparent, stable prices or the ability to comparison shop. Addressing these dystopian practices will require a multi-pronged legislative approach to restore fairness and competition in the marketplace.