Writer: Brain Guo

Imagine two people sitting beside each other at the same store with their phones out and browsing the same app for the same product. Yet, one person is being quoted a price of forty dollars while the other sees fifty-five. No product is different; only the two individuals browsing it are different. This is the reality today of many companies and products, as they employ what is called “personalized” or “surveillance” pricing to determine what each individual shopper can pay for a specific product.

What Is Personalized or Surveillance Pricing?

Personalized or surveillance pricing is the practice of collecting personal data about the consumers of a product and charging different individuals for that same product. Companies aim to determine the highest price the customer will pay for the item and then charge that price to that customer. (Surveillance Pricing). Where store-bought items may have a one-size-fits-all price for customers, personalized pricing makes it so that different customers see different prices for the same items.

How Does This Work?

In 2024, the United States Federal Trade Commission began a study on the practice of personalized pricing. Orders were sent to eight different companies that provide these pricing tools to retailers in order to gain insight into the practice (FTC Issues Orders). According to a report published in early 2025, these pricing companies have the data and information of each shopper and use that to assign personalized prices for items. The information includes location, browsing history, and even more specific data like the movements of the shopper’s mouse and the items they add to their shopping cart in online retail stores (FTC Surveillance Pricing Study). The price of an item is then adjusted for the individual customer according to this data (FTC Surveillance Pricing Study).

Where Does This Happen?

Personalized pricing is seen in many different products and services, from hotels to ride-share services (Surveillance Pricing). More specifically, there have been investigations into the grocery store giant Instacart to determine that its personalized pricing algorithm makes some individuals pay up to $1,200 more per year on their grocery trips than others (Surveillance Pricing). Additionally, the travel industry has also turned a close eye upon this practice. In the middle of 2025, the air travel company Delta Airlines became the target of scrutiny from the media and lawmakers alike after its company president said that the airline planned to roll out its artificial intelligence (AI) prices system, which it partners with the price-setting company Fetcherr, from 3% of its domestic flights to 20% of its domestic flights by the end of that year (How Delta Is Using AI). While Delta Airlines does adjust prices in their flights according to weather, demand, fuel prices, and their competitors, the price-setting of passengers’ flights according to individual factors of the passenger started to unsettle the public and lawmakers.

The Delta Firestorm

Three senators who are members of the Democratic party wrote to the Airlines’ CEO warning them that the implementation of personalized pricing for flights would lead to price increases to each passenger up to the point of their personal “pain point” in the midst of rising prices for American citizens’ products and services (How Delta Is Using AI). Former Federal Trade Commission (FTC) Chairwoman Lina Khan commented previously on the potential of this sort of pricing system; she stated that the airline would charge higher fares to individuals with whom they had gathered data to show that they recently suffered a death in their family (How Delta Is Using AI). These senators compared the use of personalized pricing by Airlines to ride-share services that adjust prices to accommodate demand at specific times and locations.

A response from Delta Air Lines stated that the company had no product or plans for a personalized price system for Airlines customers based on personal data (Delta Responds to Misinformation). The company also stated that the AI system would aid the Airlines’ staff in setting prices for flights, the prices were filed and made available to all customers, and that the use of this system is the result of misinformation by the news media (Delta Responds to Misinformation). Yet, as one AI industry analyst remarked of the airline’s initial announcement and the response to it, personalized pricing by Airlines “felt like Big Brother.” In response to the media storm over the airline’s use of AI for personalized pricing, Delta Air Lines changed its stance on the issue (Delta’s AI Pricing Backlash: The Fine Line Between Smart and Surveillance).

Why This Upsets People

Part of what upsets consumers of these products about this practice is the idea of fairness. For example, one commentator remarked on how unpleasant it would feel to be charged more for an item at a retail store beside a friend who drives the same brand of car as one’s self (Delta’s AI Pricing Faces Turbulence). According to a recent poll of U.S. citizens, 68% of those who responded to the question said that the dynamic pricing implemented by many industries was the same as price gouging (Delta’s AI Pricing Backlash: The Fine Line Between Smart and Surveillance). More specifically, while dynamic pricing according to time of day, demand for products, and other industry-based factors is accepted by most consumers, the practice of changing the price of an item according to an individual’s personal location, interest in products, personal data, and other factors is more unsettling for the customers (Delta’s AI Pricing Backlash: The Fine Line Between Smart and Surveillance).

Another reason for the concern of consumers is the amount of personal data that is collected about each individual. The practice of collecting personal data to determine prices is fueled by the data brokers that possess the personal information of each American citizen. This practice raises concerns of the privacy of those consumers. When the Federal Trade Commission’s Chair stated before the launch of the investigation into personalized pricing that the organizations that gather the data of American citizens have a potential to threaten the privacy of those consumers and to take advantage of their personal data to charge them more prices for the products and services that they offer, many consumers share his concerns (FTC Issues Orders).

The third major reason for the concern of customers is related to the distribution of the prices of these products. One analysis of the AI-based personalized pricing system for Airlines implemented by the company Delta Airlines revealed that most customers that paid the lowest prices with the system were those with the highest income (Delta’s AI Pricing Faces Turbulence). This price system creates the potential that each customer is charged the maximum price that they are willing or able to pay for a product, which may not assist the customers of low-income levels and that can pay for the products.

The Case for Personalized Pricing

None of the concerns related to personalized pricing are unfounded. Yet, Airlines and other companies use dynamic pricing for different reasons. Dynamic pricing according to demand has been used by Airlines and other industries for decades. Additionally, these companies that use personalized pricing according to customer data also offer discounts to customers with data-based recommendations; the company may offer a discount to a customer that meets certain criteria to encourage the customers to purchase its products. The use of dynamic pricing is similar to that of the price adjustments of a fast food restaurant like Chili’s that may charge thirty dollars for a chicken sandwich; the customers who must pay that price will begin to move to another restaurant that offers the same product at a lower price (How Delta Is Using AI). This behavior by Airlines and others may be seen as efficient by proponents of this practice; yet it creates issues with the fairness of these prices.

Where Are the Regulations Going?

The Federal Trade Commission announced its findings in its report on personalized pricing in early 2025. Yet, the announcement of the findings before the release of the final report to the news media is unusual (FTC Surveillance Pricing Study). Because there are no current regulations from the Federal government regarding the use of personalized pricing, individual states have begun to create regulations regarding both dynamic and algorithmic pricing of products for consumers (Amidst Uncertainty). For example, Senators from both the Republican and Democratic parties proposed legislation that would prohibit companies from using artificial intelligence to establish individual prices or wages according to personal data that could indicate that an individual is in need of a medical emergency, having recently suffered a death in the family, or experiencing another sensitive personal circumstance (How Delta Is Using AI). Additionally, because the applications of these types of personalized pricing tools range across the United States economy, any regulation of this practice will impact many different areas of the economy (Amidst Uncertainty).

Conclusion

The use of personalized prices for individuals within the same company and for the same product is a result of the collection of the personal data of those consumers, the rise of artificial intelligence in the processing of such personal data and information by the companies, and the desire of the companies to charge each customer what they deem that the customer can pay for the product. When used appropriately, this system may benefit the customers by allowing for various discounts to be made for those who may qualify for them. Yet, if implemented in these ways in which the AI systems are currently being implemented by major American companies into their products, personalized pricing may lead to issues of fairness and privacy within the United States and the markets of the nation. As such, people will have to determine an appropriate amount of individualization of prices by artificial intelligence within the economy, and under what situations such personalization is efficient or simply unfair to those who are required to pay for those products.

Works Cited

Amidst Uncertainty from FTC, States Zero In on Dynamic and Algorithmic Pricing. Wiley Rein LLP, 4 Mar. 2026, www.wiley.law/article-Amidst-uncertainty-from-FTC-states-zero-in-on-dynamic-and-algorithmic-pricing. Accessed 3 July 2026.

Delta Responds to Misinformation Around AI Pricing. Delta Air Lines, 7 Aug. 2025, news.delta.com/delta-responds-misinformation-around-ai-pricing. Accessed 3 July 2026.

Delta’s AI Pricing Backlash: The Fine Line Between Smart and Surveillance. EMARKETER, 19 Sept. 2025, www.emarketer.com/content/delta-s-ai-pricing-backlash–fine-line-between-smart-surveillance. Accessed 3 July 2026.

Delta’s AI Pricing Faces Turbulence on Capitol Hill. U.S. News & World Report, 24 July 2025, www.usnews.com/news/u-s-news-decision-points/articles/2025-07-24/deltas-ai-pricing-faces-turbulence-on-capitol-hill. Accessed 3 July 2026.

FTC Issues Orders to Eight Companies Seeking Information on Surveillance Pricing. Federal Trade Commission, 23 July 2024, www.ftc.gov/news-events/news/press-releases/2024/07/ftc-issues-orders-eight-companies-seeking-information-surveillance-pricing. Accessed 3 July 2026.

FTC Surveillance Pricing Study Indicates Wide Range of Personal Data Used to Set Individualized Consumer Prices. Federal Trade Commission, 17 Jan. 2025, www.ftc.gov/news-events/news/press-releases/2025/01/ftc-surveillance-pricing-study-indicates-wide-range-personal-data-used-set-individualized-consumer. Accessed 3 July 2026.

How Delta Is Using AI for Ticket Pricing and What It Means for Air Travel. ABC News, 5 Aug. 2025, www.goodmorningamerica.com/travel/story/delta-ai-ticket-pricing-means-air-travel-124343088. Accessed 3 July 2026.

Surveillance Pricing. Electronic Privacy Information Center (EPIC), epic.org/issues/consumer-privacy/surveillance-pricing/. Accessed 3 July 2026.