Sen. Ruben Gallego introduced legislation that would bar businesses from using personal information they collect about customers to charge people different prices for the same products.
Gallego’s One Fair Price Act would target so-called surveillance pricing, or the practice of using detailed personal information gathered from consumers to create an individualized price.
“They're collecting so much information that it's not really capitalism anymore,” Gallego said. “It's truly exploitative at this point.”
Gallego’s office pointed to early findings released by the Federal Trade Commission in January from the last days of the Biden administration suggesting retailers are using a wide swath of data — from a person’s location to their mouse movements on a website — to create targeted pricing.
President Donald Trump’s FTC Chair Andrew Ferguson, who voted against releasing that early surveillance pricing report, also ended a request for public comment on surveillance pricing shortly after Trump took office. A spokesman for the agency told the New York Times the overall study is ongoing.
The legislation would make it illegal for a company to use surveillance data to charge consumers different prices for the same product and give the FTC, state attorneys general and individuals the ability to sue to enforce that prohibition. The law wouldn’t apply to insurance or credit companies, according to a summary provided by Gallego’s office.
It would still allow companies to offer discounts to groups of people — such as teachers or veterans — and through loyalty programs, as long as those programs don’t treat all consumers equally.
Lindsay Owens, executive director of the progressive Groundwork Collaborative, said the legislation is needed to combat the increased use of technology to price gouge consumers.
She referenced Delta Air Lines, which told investors it could use artificial intelligence to set personalized prices for some customers, and Starbucks, which reportedly engaged in surveillance pricing via its rewards app, according to the Washington Post.
“This is basically a new frontier of pricing advisors, pricing consultants, pricing AI tech companies that really build the underlying technology and infrastructure that these larger retailers can use in setting pricing,” she said.
Gallego announced the new legislation on the same day that the Groundwork Collaborative and Consumer Reports issued its own study that found Instacart, the app that allows buyers to purchase groceries from a variety of retailers, charges consumers different prices for different products.
Owens said they found no evidence that Instacart was using demographic data collected from users to target those prices but that the subsequent conversations with Instacart revealed other large companies are collecting and using that information.
“They did let us know in writing that some of the consumer packaged goods companies who sell the products that Instacart offers at the grocery store, those companies are actually using behavioral data in their pricing and discounting and promotional decisions,” Owens said.
It’s still unclear whether Gallego’s legislation will gain any traction on Capitol Hill, where it will need to pass through the Republican-controlled Congress and President Trump to make it into law.
Gallego, a Democrat, said he does not believe it is a partisan issue.
“Everything takes time. It doesn't matter when you introduce it and who (introduces it), whether you're a Democrat or Republican, so I'm willing to work it,” Gallego said. “But I think that this can have a lot of support across the board.”
President Trump issued an executive order last week ordering an investigation into potential price fixing and anti-competitive behavior by companies involved in the country's food supply chain.
The White House did not respond to a request to comment on Gallego’s legislation.
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