Priced Out: How Surveillance Pricing Leaves People with Disabilities At Risk

The BeyHive is not happy. After Beyoncé announced her Cowboy Carter Tour, fans were buzzing to buy tickets for the show — but many soon realized prices varied widely from fan to fan. According to Axios, there was a $1,200 difference in ticket prices between customers at some shows — even for seats in the same section. Why?

The answer could be that prices varied through a practice like dynamic pricing, which responds to market supply and demand, or something more individualized and much more concerning: surveillance pricing. Surveillance pricing is a method of setting prices based not on market forces, but on private personal data that companies collect and purchase — and on inferences they make about how much a particular individual may be willing to pay based on that personal information. Early this year, the Federal Trade Commission published a study on surveillance pricing finding that retailers were “frequently” using consumers’ personal information to set individualized prices for goods and services.

In addition to the FTC, the practice has drawn both skepticism and ire among digital rights, antitrust, and privacy advocates. According to the Center for Democracy & Technology’s George Slover, surveillance pricing — also referred to as “bespoke pricing” because prices can be tailored to fit particular customers — may be based on information ranging from a consumer’s previous purchases of or searches for a product, their urgency seeking that product, or “by other behaviors tracked and fed into the big data maw, that may indicate the consumer is more susceptible to sales-pitch puffery or pressure.”

As understanding of surveillance pricing becomes more widespread, its likely negative effects are also becoming increasingly clear, including invasions of privacy, increased prices, and unfair competition by the dominant companies that can amass and process the necessary volume of data to engage in these practices. These effects may disproportionately impact marginalized groups, including people with disabilities. However, because companies are not required to disclose when they are engaged in surveillance pricing, it is difficult to know how many people with disabilities are impacted by these practices and how. We agree with Former FTC-Chair Lina Khan that the FTC should further investigate surveillance pricing, “because Americans deserve to know how their private data is being used to set the prices they pay and whether firms are charging different people different prices for the same good or service.”

Very little has been written about the ways that surveillance pricing can impact people with disabilities, but it is likely that disabled people (particularly multiply-marginalized disabled people) are uniquely vulnerable to these practices due to several risk factors. Many people with disabilities regularly purchase items related to their disability, and do not have much choice in what they need, or when they need it. They may also be limited in where they can shop due to mobility limitations, difficulty finding accessible transportation, or other factors related to their disability. This means that both the privacy and consumer protection concerns that apply to all consumers in the context of surveillance pricing are particularly worrisome for disabled people.

For example, many disabled consumers consistently purchase medical supplies like gloves, bandages, or over-the-counter medications, or incur recurring expenses related to dietary needs, wheelchair repairs, or assistive technologies. These sorts of extra costs are so prevalent for disabled people that, according to the National Disability Institute, a household containing an adult with a disability requires, on average, 28% more income to sustain the same standard of living as a household without a person with a disability. This is sometimes referred to as the “disability tax.”

Algorithmic data analysis is now sufficiently sophisticated to allow firms to identify the essential nature of particular products (like bandages or wheelchair repairs) for a person with a disability, infer that the person would pay more for that product, and offer that individual a higher price. The system could also offer a consumer a higher price for a product that it incorrectly infers is not essential, but notices is frequently purchased (like a particular brand of a food item, for individuals with allergies)and then conclude that that consumer would pay more for that item than for alternative brands. In this way, surveillance pricing could increase the disability tax.

As a general matter, the Americans with Disabilities Act (ADA) protects people with disabilities against discrimination in various arenas, and some scholars have argued that price discrimination is a prohibited practice under this statute as well. Following this, discrimination caused by surveillance pricing that impacts people with disabilities could already run afoul of the ADA. Advocates are also encouraging state attorneys general to consider how already-existing state consumer protection and competition laws could help to curtail unfair use of these practices. But the opacity of pricing algorithms may require targeted and well-designed regulation in order to protect all consumers, including people with disabilities, from the detrimental effects of surveillance pricing.

The current FTC does not appear likely to take further action on surveillance pricing, considering that Chair Andrew Ferguson closed a request for information on surveillance pricing almost immediately after the inauguration of President Donald Trump this year. But, several states including California, Colorado, Georgia, and Illinois debated or are still considering legislation this year that would regulate the practice, including prohibiting businesses from adjusting prices based on personal data like online associations, recent financial or retail transactions, or demographics. Most of these bills do not explicitly mention disability (e.g., bills in Illinois, Colorado, and Georgia did not; the California bill did upon introduction). These proposals could nevertheless provide protections that are uniquely important for people with disabilities, but it is vital that the experiences of disabled people are specifically considered in the regulatory process.

As these protections are designed and adopted, we encourage advocates to ensure that disability advocacy groups are specifically invited to participate in the regulatory and policy-making process. Thoughtful, inclusive regulation of surveillance pricing is possible, and advisable. Without it, people with disabilities could face far more impactful consequences than raised prices on concert tickets.