Are retailers using AI to access customers’ personal data and set higher prices for those they think will pay more?

You go into a store to buy a two-litre bottle of milk at your local supermarket and pay $3. But the person before you in the queue paid $3.50. And the person after you paid $2. What if those prices were based on your personal data or circumstances, or even the battery power on your phone?

This may sound like science fiction, but it’s not as far-fetched as you might think.

In July, US group Delta Air Lines revealed that approximately 3 percent of its domestic fare pricing is determined using artificial intelligence (AI) – although it has not elaborated on how this happens. The company said it aims to increase this figure to 20 percent by the end of this year.

The news raised concerns among consumers that Delta might be using customers’ data to determine what to charge them. So, US Senators Mark Warner, Ruben Gallego and Richard Blumenthal sent a letter to Delta Air Lines requesting further information about its reported plans to implement AI-driven “dynamic pricing”.

“Delta’s current and planned individualised pricing practices not only present data privacy concerns but will also likely mean fare price increases up to each individual consumer’s personal ‘pain point’ at a time when American families are already struggling with rising costs,” the letter stated.

Although Delta did not deny using AI to set prices, it replied, telling the senators that it does not use it for “discriminatory or predatory pricing practices”.

According to former Federal Trade Commission Chair Lina Khan, however, some companies are able to use your personal data to predict what they know as your “pain point” – the maximum amount you’re willing to spend for a specific good or service.

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In January, the US’s Federal Trade Commission (FTC), which regulates fair competition, reported on a surveillance pricing study it carried out in July 2024.

It found that companies can collect data directly through account registrations, email sign-ups and online purchases in order to do this. Additionally, web pixels installed by intermediaries track digital signals including your IP address, device type, browser information, language preferences and “granular” website interactions such as mouse movements, scrolling patterns and video viewing behaviour.

This is known as “surveillance pricing”.

What is surveillance pricing?

Surveillance pricing is