Instacart reaches into your pocket and lops a third off your dollars
I'm at the end of my tour for my new book, the international bestseller Enshittification. My last two stops are CCC in Hamburg, Dec 27-30 and the Tattered Cover in Denver (Jan 22). Hope to see you!
There's a whole greedflation-denial cottage industry that insists that rising prices are either the result of unknowable, untameable and mysterious economic forces, or they're the result of workers having too much money and too many jobs.
The one thing we're absolutely not allowed to talk about is the fact that CEOs keep going on earnings calls to announce that they are hiking prices way ahead of any increase in their costs, and blaming inflation:
Nor are we supposed to notice the "price consultancies" that let the dominant firms in many sectors – from potatoes to meat to rental housing – fix prices in illegal collusive arrangements that are figleafed by the tissue-thin excuse that "if you use an app to fix prices, it's not a crime":
And we're especially not supposed to notice the proliferation of "personalized pricing" businesses that use surveillance data to figure out how desperate you are and charge you a premium based on that desperation:
Surveillance pricing – when you are charged more for the same goods than someone else, based on surveillance data about the urgency of your need and the cash in your bank account – is a way for companies to reach into your pocket and devalue the dollars in your wallet. After all, if you pay $2 for something that I pay $1 for, that's just the company saying that your dollars are only worth half as much as mine:
The economy is riddled with surveillance pricing gouging. You are almost certainly paying more than your neighbors for various items, based on algorithmic price-setting, every day. Case in point: More Perfect Union and Groundwork Collaborative teamed up with Consumer Reports to recruit 437 volunteers from across America to login to Instacart at the same time and buy the same items from 15 stores, and found evidence of surveillance pricing at Albertsons, Costco, Kroger, and Sprouts Farmers Market:
The price-swings are wild. Some test subjects are being charged 23% more than others. The average variance for "the exact same items, from the exact same locations, at the exact same time" comes out to 7%, or "$1,200 per year for groceries" for a family of four.
The process by which your greedflation premium is assigned is opaque. The researchers found that Instacart shoppers ordering from Target clustered into seven groups, but it's not clear how Instacart decides how much extra to charge any given shopper.
Instacart – who acquired Eversight, a surveillance pricing company, in 2022 – blamed the merchants (who, in turn, blamed Instacart). Instacart also claimed that they didn't use surveillance data to price goods, but hedged, admitting that the consumer packaged goods duopoly of Unilever and Procter & Gamble do use surveillance data in connection with their pricing strategies.
Finally, Instacart claimed that this was all an "experiment" to "learn what matters most to consumers and how to keep essential items affordable." In other words, they were secretly charging you more (for things like eggs and bread) because somehow that lets them "keep essential items affordable."
Instacart said their goal was to help "retail partners understand consumer preferences and identify categories where they should invest in lower prices."
Anyone who's done online analytics can easily pierce this obfuscation, but for those of you who haven't had the misfortune of directing an iterated, A/B tested optimization effort, I'll unpack this statement.
Say you have a pool of users and a bunch of variations on a headline. You randomly assign different variants to different users and measure clickthroughs. Then you check to see which variants performed best, and dig into the data you have on those users to see if there are any correlations that tie together users who liked a given approach.
This might let you discover that, say, women over 40 click more often on headlines that mention kittens. Then you generate more variations based on these conclusions – different ways of mentioning kittens – and see which of these variations perform best, and whether the targeted group of users split into smaller subgroups (women over 40 in the midwest prefer "tabby kitten" while their southern sisters prefer "kitten" without a mention of breed).
By repeatedly iterating over these steps, you can come up with many highly refined variants, and you can use surveillance data to target them to ever narrower, more optimized slices of your user-base.
Obviously, this is very labor intensive. You have to do a lot of tedious analysis, and generate a lot of variants. This is one of the reasons that slopvertising is so exciting to the worst people on earth: they imagine that they can use AI to create a self-licking ice-cream cone, performing the analysis and generating endless new variations, all untouched by human hands.
But when it comes to prices, it's much easier to produce variants – all you're doing is adding or subtracting from the price you show to shoppers. You don't need to get the writing team together to come up with new ways of mentioning kittens in a headline – you can just raise the price from $6.23 to $6.45 and see if midwestern women over 40 balk or add the item to their shopping baskets.
And here's the kicker: you don't need to select by gender, racial or economic criteria to end up with a super-racist and exploitative arrangement. That's because race, gender and socioeconomic status have broad correlates that are easily discoverable through automated means.
For example, thanks to generations of redlining, discriminatory housing policy, wage discrimination and environmental racism, the poorest, sickest neighborhoods in the country are also the most racialized and are also most likely to be "food deserts" where you can't just go to the grocery store and shop for your family.
What's more, the private equity-backed dollar store duopoly have waged a decades-long war on community grocery stores, enveloping them with dollar stores that use their access to preferential discounts (from companies like Unilever and Procter & Gamble, another duopoly) to force grocers out of business:
Then these dollar stores run a greedflation scam that is so primitive, it's almost laughable: they just charge customers much higher amounts than the prices shown on the shelves and price-tags:
When you live in a food desert where your only store is a Dollar General that defrauds you at the cash-register, you are more likely to accept a higher price from Instacart, because you have fewer choices than someone in a middle-class neighborhood with two or three competing grocers. And the people who live in those food deserts are more likely to be poor, which, in America, is an excellent predictor of whether they are Black or brown.
Which is to say, without ever saying, "Charge Black people more for groceries," Instacart can easily A/B split its way into a system where they predictably and reliably charges Black people more for groceries. That's the old cod-Marxism at work: "from each according to their desperation."
This is so well-understood that anyone who sets one of these systems in motion should be understood to be deliberately seeking to do racist profiteering under cover of an algorithm. It's empiricism-washing: "I'm not racist, I just did some math" (that produced a predictably racist outcome):
This is the dark side and true meaning of "business optimization." The optimal business pays its suppliers and workers nothing, and charges its customers everything it can. Obviously, businesses need to settle for suboptimal outcomes, because workers won't show up if they don't get paid, and customers won't buy things that cost everything they have⹋.
⹋ Unless, of course, you are an academic publisher, in which case this is just how you do business.
A business "optimizes" its workforce by finding ways to get them to accept lower wages. For example, they can bind their workers with noncompete "agreements" that ban Wendy's cashiers from quitting their job and making $0.25 more per hour at the McDonald's next door (one in 18 American workers have been locked into one of these contracts):
Or they can lock their workers in with "training repayment agreement provisions" (TRAPs) – contractual clauses that force workers to pay their bosses thousands of dollars if they quit or get fired:
But the most insidious form of worker optimization is "algorithmic wage discrimination." That's when a company uses surveillance data to lower the wages of workers. For example, contract nurses are paid less if the app that hires them discovers (through the unregulated data-broker sector) that they have a lot of credit-card debt. After all, nurses who are heavily indebted can't afford to be choosy and turn down lowball offers:
This is the other form of surveillance pricing: pricing labor based on surveillance data. It's more cod-Marxism: "From each according to their desperation."
Forget "becoming ungovernable": to defeat these evil fuckers, we have to become unoptimizable:
How do we do that? Well, nearly every form of "optimization" begins with surveillance. They can't figure out whether they can charge you more if they can't spy on you. They can't figure out whether they can pay you less if they can't spy on you, either.
And the reason they can spy on you is because we let them. The last consumer privacy law to pass out of Congress was a 1988 bill that bans video-store clerks from disclosing your VHS rental history. Every other form of consumer surveillance is permitted under US federal law.
So step one of this process is to ban commercial surveillance. Banning algorithmic price discrimination is all well and good, but it is, ultimately, a form of redistribution. We're trying to make the companies share some of the excess they extract from our surveillance data. But predistribution – ending surveillance itself, in this case – is always far more effective than redistribution:
How do we do that? Well, we need to build a coalition. At the Electronic Frontier Foundation, we call this "privacy first": you can't solve all the internet's problems by fixing privacy, but you won't fix most of them unless we get privacy right, and so the (potential) coalition for a strong privacy regime is large and powerful:
But of course, "privacy first," doesn't mean "just privacy." We also need tools that target algorithmic pricing per se. In New York State, there's a new law that requires disclosure of algorithmic pricing, in the form of a prominent notification reading, "THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA."
This is extremely weaksauce, and might even be worse than nothing. In California we have Prop 65, a rule that requires businesses to post signs and add labels any time they expose you to chemicals "known to the state of California to cause cancer." This caveat emptor approach (warn people, let them vote with their wallets) has led to every corner of California's built environment to be festooned with these warnings. Today, Californians just ignore these warnings, the same way that web users ignore the "privacy policy" disclosures on the sites they visit:
The right approach isn't to (merely) warn people about carcinogens (or privacy risks). The right approach is regulating harmful business practices, whether those practices give you a tumor or pick your pocket.
Under Biden, former FTC chair Lina Khan undertook proceedings to ban algorithmic pricing altogether. Trump's FTC killed that, along with all the other quality-of-life enhancing measures the FTC had in train (Trump's FTC chair replaced these with a program to root out "wokeness" in the agency).
Today, Khan is co-chair of Zohran Mamdani's transition team, and she will use the mayor's authority (under the New York City Consumer Protection Law of 1969, which addresses "unconscionable" commercial practices) to ban algorithmic pricing in NYC:
Khan wasn't Biden's only de-optimizer. Under chair Rohit Chopra, Biden's Consumer Finance Protection Bureau actually banned the data-brokers who power surveillance pricing:
These are efforts to optimize corporations for human thriving, by making them charge us less and pay us more. For while we are best off when we are unoptimizable, we are also best off when corporations are totally optimized – for our benefit.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
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Mike Lee and Jim Jordan want to kill the law that bans companies from cheating you
I'm on a 20+ city book tour for my new novel PICKS AND SHOVELS. Catch me at NEW ZEALAND'S UNITY BOOKS in AUCKLAND on FRIDAY (May 2), and in WELLINGTON on SATURDAY (May 3). More tour dates (Pittsburgh, PDX, London, Manchester) here.
House and Senate Republicans are on the verge of killing Section 5 of the Federal Trade Commission Act, one of the most potent anti-corruption laws on the US statute books:
More than a century ago, Congress passed the FTCA, and they made a point of including a clause that granted the new independent agency broad authority to investigate and prohibit "unfair and deceptive methods of competition." As Matt Stoller writes, over the ensuing 100 years, the FTC has used Section 5 to go after "illegal commissions, firms spying on rivals, sabotage, messing around with patents or regulations."
But starting with the Reagan era, both Republican and Democratic presidents have appointed FTC chairs who were loathe to invoke FTCA 5, shying away from the power and duty Congress had given them. This all changed with Biden's FTC chair Lina Khan, who revived the law, using it to punish companies for invading your privacy, blocking repair, locking workers in with noncompete clauses, and more:
FTCA has been repeatedly upheld by the Supreme Court, and Congress liked the way it worked so much that when they created the Department of Transport, they copy-pasted the language of FTCA into the DOT's enabling legislation. Pete Buttigieg, Biden's Transport secretary, refused to use this power, but when Khan's chief of staff moved over to Transport, it became a powerhouse regulator, fighting ripoffs and scams in aviation, rail and more:
Neoclassical economists hate laws like Section 5. The entire basis of neoliberal economics is that the economy can be modeled – and thus controlled – using mathematics. This ideology requires that economists ignore all qualitative aspects of society. Notoriously, economic modeling treats power as irrelevant, because it can't be quantified and plugged into a model:
This is a hell of a deal for the powerful. Ignoring power lets a rich person who buys a starving person's kidneys claim to be engaged in a "voluntary transaction." Ignoring power lets private equity funds claim that gouging you on emergency room care and ambulance rides is fine, because you "freely chose" to be rushed to their hospital while dying of a heart attack. If we can all agree that power doesn't matter, then we can do away with all workplace protections, from the minimum wage to worker safety. Take power out of the equation, and you can claim that any worker on starvation wages who loses an arm in a badly maintained machine "freely contracted" into that situation.
Oligarchs and their lickspittles have waged a generations-long war on the very concept of power, and this assault on Section 5 of the FTC Act is just the latest skirmish. You see, "unfair and deceptive" is a qualitative idea, one that requires consideration of power relationships.
The abolition of fairness as a concept is central to Trumpism. Notoriously, Trump has claimed that any time he successfully rips someone off, "That makes him smart":
The Trump movement is full of extremely successful cheats and liars. There's VCs like Mark Andreesen, whose fund paid a $100m bribe Kickstarter execs in exchange for a fake cryptocurrency launch, in a bid to lure more retail investors into the crypto bubble that Andreesen-Horowitz played a central role in:
And of course, there's Elon Musk, who lies about his cars, his robots, his rockets, his AI, and everything else. No wonder Elon Musk wants to get rid of a law that bans "unfair and deceptive methods of competition."
The bid to kill Section 5 of the FTC Act is hidden deep in a budget reconciliation amendment introduced by Rep Jim Jordan (R-OH), which pastes in sloppy language drafted by Sen Mike Lee (R-UT). The mechanism by which this amendment will neuter Section 5 is eye-glazingly complex, though Stoller does his best to make it comprehensible.
Far more important than the method by which Section 5 of the FTC Act will be gutted is the consequence of doing so. Stripping the FTC of the power to chase unfair and deceptive conduct will fire a starting pistol for even more ripoffs and scams. Worse than that, the Jordan amendment will kill enforcement of existing consent decrees from companies that have been successfully prosecuted under Section 5, allowing them to restart the scams that attracted regulatory scrutiny.
The Trump administration has been touting antitrust as its "alternative to regulation," drawing an arbitrary line between "regulation" and "antitrust." Antitrust is absolutely regulation:
Indeed, antitrust is the most important regulation of all, because it's the regulation that keeps companies from getting so large and powerful that they can ignore all the other regulations. Without antitrust, companies become too big to fail, then too big to jail, then too big to care. The Trump admin will absolutely continue to do antitrust, but in the Trumpiest way possible – by attacking companies that offend Trump, rather than attacking companies that harm the public:
This is gangsterism, the thing that comes after capitalism collapses into feudalism. In gangsterism, "fairness" and "power" have no place. All that's left is a kind of caveat emptor brainworm that insists that if you got scammed, you should have shopped more carefully. And if you got scammed at gunpoint, you just need to understand that the gun was held by the invisible hand, and it was pointed at you in an economically efficient manner.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, a d-free, tracker-free blog:
THIS WEEKEND (June 7–9), I'm in AMHERST, NEW YORK to keynote the 25th Annual Media Ecology Association Convention and accept the Neil Postman Award for Career Achievement in Public Intellectual Activity.
Correction, 7 June 2024: The initial version of this article erroneously described Jeffrey Roper as the founder of ATPCO. He benefited from ATPCO, but did not co-found it. The initial version of this article called ATPCO "an illegal airline price-fixing service"; while ATPCO provides information that the airlines use to set prices, it does not set prices itself, and while the DOJ investigated the company, they did not pursue a judgment declaring the service to be illegal. I regret the error.
Noted anti-capitalist agitator Adam Smith had it right: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
Despite being a raving commie loon, Smith's observation was so undeniably true that regulators, policymakers, and economists couldn't help but acknowledge that it was true. The trustbusting era was defined by this idea: if we let the number of companies in a sector get too small, or if we let one or a few companies get too big, they'll eventually start to rig prices.
What's more, once an industry contracts corporate gigantism, it will become too big to jail, able to outspend and overpower the regulators charged with reining in its cheating. Anyone who believes Smith's self-evident maxim had to accept its conclusion: that companies had to be kept smaller than the state that regulated them. This wasn't about "punishing bigness" – it was the necessary precondition for a functioning market economy.
We kept companies small for the same reason that we limited the height of skyscrapers: not because we opposed height, or failed to appreciate the value of a really good penthouse view – rather, to keep the building from falling over and wrecking all the adjacent buildings and the lives of the people inside them.
Starting in the neoliberal era – Carter, then Reagan – we changed our tune. We liked big business. A business that got big was doing something right. It was perverse to shut down our best companies. Instead, we'd simply ban big companies from rigging prices. This was called the "consumer welfare" theory of antitrust. It was a total failure.
40 years later, nearly every industry is dominated by a handful of companies, and these companies price-gouge us with abandon. Worse, they use their gigantic ripoff winnings to fill war-chests that fund the corruption of democracy, capturing regulators so that they can rip us off even more, while ignoring labor, privacy and environmental law and ducking taxes.
It turns out that keeping gigantic, opaque, complex corporations honest is really hard. They have so many ways to shuffle money around that it's nearly impossible to figure out what they're doing. Digitalization makes things a million times worse, because computers allow businesses to alter their processes so they operate differently for every customer, and even for every interaction.
This is Dieselgate times a billion: VW rigged its cars to detect when they were undergoing emissions testing and switch to a less polluting, more compliant mode. But when they were on the open road, they spewed lethal quantities of toxic gas, killing people by the thousands. Computers don't make corporate leaders more evil, but they let evil corporate leaders execute far more complex and nefarious plans. Digitalization is a corporate moral hazard, making it just too easy and tempting to rig the game.
That's why Toyota, the largest car-maker in the world, just did Dieselgate again, more than a decade later. Digitalization is a temptation no giant company can resist:
https://www.bbc.com/news/articles/c1wwj1p2wdyo
For forty years, pro-monopoly cheerleaders insisted that we could allow companies to grow to unimaginable scale and still prevent cheating. They passed rules banning companies from explicitly forming agreements to rig prices. About ten seconds later, new middlemen popped up offering "information brokerages" that helped companies rig prices without talking to one another.
Take Agri Stats: the country's hyperconcentrated meatpacking industry pays Agri Stats to "consult on prices." They provide Agri Stats with a list of their prices, and then Agri Stats suggests changes based on its analysis. What does that analysis consist of? Comparing the company's prices to its competitors, who are also Agri Stats customers:
In other words, Agri Stats finds the highest price for each product in the sector, then "advises" all the companies with lower prices to raise their prices to the "competitive" level, creating a one-way ratchet that sends the price of food higher and higher.
More and more sectors have an Agri Stats, and digitalization has made this price-gouging system faster, more efficient, and accessible to sectors with less concentration. Landlords, for example, have tapped into Realpage, a "data broker" that the same thing to your rent that Agri Stats does to meat prices. Realpage requires the landlords who sign up for its service to accept its "recommendations" on minimum rents, ensuring that prices only go up:
Writing for The American Prospect, Luke Goldstein lays out the many ways in which these digital intermediaries have supercharged the business of price-rigging:
Goldstein identifies a kind of patient zero for this ripoff epidemic: Jeffrey Roper, a former Alaska Air exec who benefited from a service that helps airlines set prices. ATPCO was investigated by the DOJ in the 1990s, but the enforcers lost their nerve and settled with the company, which agreed to apply some ornamental fig-leafs to its collusion-machine. Even those cosmetic changes were seemingly a bridge too far Roper, who left the US.
But he came back to serve as Realpage's "principal scientist" – the architect of a nationwide scheme to make rental housing vastly more expensive. For Roper, the barrier to low rents was empathy: landlords felt stirrings of shame when they made shelter unaffordable to working people. Roper called these people "idiots" who sentimentality "costs the whole system."
Sticking a rent-gouging computer between landlords and the people whose lives they ruin is a classic "accountability sink," as described in Dan Davies' new book "The Unaccountability Machine: Why Big Systems Make Terrible Decisions – and How The World Lost its Mind":
It's a form of "empiricism washing": if computers are working in the abstract realm of pure numbers, they're just moving the objective facts of the quantitative realm into the squishy, imperfect qualitative world. Davies' interview on Trashfuture is excellent:
To rig prices, an industry has to solve three problems: the problem of coming to an agreement to fix prices (economists call this "the collective action problem"); the problem of coming up with a price; and the problem of actually changing prices from moment to moment. This is the ripoff triangle, and like a triangle, it has many stable configurations.
The more concentrated an industry is, the easier it is to decide to rig prices. But if the industry has the benefit of digitalization, it can swap the flexibility and speed of computers for the low collective action costs from concentration. For example, grocers that switch to e-ink shelf tags can make instantaneous price-changes, meaning that every price change is less consequential – if sales fall off after a price-hike, the company can lower them again at the press of a button. That means they can collude less explicitly but still raise prices:
My name for this digital flexibility is "twiddling." Businesses with digital back-ends can alter their "business logic" from second to second, and present different prices, payouts, rankings and other key parts of the deal to every supplier or customer they interact with:
https://pluralistic.net/2023/02/19/twiddler/
Not only does twiddling make it easier to rip off suppliers, workers and customers, it also makes these crimes harder to detect. Twiddling made Dieselgate possible, and it also underpinned "Greyball," Uber's secret strategy of refusing to send cars to pick up transportation regulators who would then be able to see firsthand how many laws the company was violating:
Twiddling is so easy that it has brought price-fixing to smaller companies and less concentrated sectors, though the biggest companies still commit crimes on a scale that put these bit-players to shame. In The Prospect, David Dayen investigates the "personalized pricing" ripoff that has turned every transaction into a potential crime-scene:
"Personalized pricing" is the idea that everything you buy should be priced based on analysis of commercial surveillance data that predicts the maximum amount you are willing to pay.
Proponents of this idea – like Harvard's Pricing Lab with its "Billion Prices Project" – insist that this isn't a way to rip you off. Instead, it lets companies lower prices for people who have less ability to pay:
https://thebillionpricesproject.com/
This kind of weaponized credulity is totally on-brand for the pro-monopoly revolution. It's the same wishful thinking that led regulators to encourage monopolies while insisting that it would be possible to prevent "bad" monopolies from raising prices. And, as with monopolies, "personalized pricing" leads to an overall increase in prices. In econspeak, it is a "transfer of wealth from consumer to the seller."
"Personalized pricing" is one of those cuddly euphemisms that should make the hair on the back of your neck stand up. A more apt name for this practice is surveillance pricing, because the "personalization" depends on the vast underground empire of nonconsensual data-harvesting, a gnarly hairball of ad-tech companies, data-brokers, and digital devices with built-in surveillance, from smart speakers to cars:
Much of this surveillance would be impractical, because no one wants their car, printer, speaker, watch, phone, or insulin-pump to spy on them. The flexibility of digital computers means that users always have the technical ability to change how these gadgets work, so they no longer spy on their users. But an explosion of IP law has made this kind of modification illegal:
https://locusmag.com/2020/09/cory-doctorow-ip/
This is why apps are ground zero for surveillance pricing. The web is an open platform, and web-browsers are legal to modify. The majority of web users have installed ad-blockers that interfere with the surveillance that makes surveillance pricing possible:
But apps are a closed platform, and reverse-engineering and modifying an app is a literal felony – several felonies, in fact. An app is just a web-page skinned with enough IP to make it a felony to modify it to protect your consumer, privacy or labor rights:
(Google is leading a charge to turn the web into the kind of enshittifier's paradise that apps represent, blocking the use of privacy plugins and proposing changes to browser architecture that would allow them to felonize modifying a browser without permission:)
Apps are a twiddler's playground. Not only can they "customize" every interaction you have with them, but they can block you (or researchers seeking to help you) from recording and analyzing the app's activities. Worse: digital transactions are intimate, contained to the palm of your hand. The grocer whose e-ink shelf-tags flicker and reprice their offerings every few seconds can be collectively observed by people who are in the same place and can start a conversation about, say, whether to come back that night a throw a brick through the store's window to express their displeasure. A digital transaction is a lonely thing, atomized and intrinsically shielded from a public response.
That shielding is hugely important. The public hates surveillance pricing. Time and again, through all of American history, there have been massive and consequential revolts against the idea that every price should be different for every buyer. The Interstate Commerce Commission was founded after Grangers rose up against the rail companies' use of "personalized pricing" to gouge farmers.
Companies know this, which is why surveillance pricing happens in secret. Over and over, every day, you are being gouged through surveillance pricing. The sellers you interact with won't tell you about it, so to root out this practice, we have to look at the B2B sales-pitches from the companies that sell twiddling tools.
One of these companies is Plexure, partly owned by McDonald's, which provides the surveillance-pricing back-ends for McD's, Ikea, 7-Eleven, White Castle and others – basically, any time a company gives you a hard-sell to order via its apps rather than its storefronts or its website, you should assume you're getting twiddled, hard.
These companies use the enshittification playbook to trap you into using their apps. First, they offer discounts to customers who order through their apps – then, once the customers are fully committed to shopping via app, they introduce surveillance pricing and start to jack up the prices.
For example, Plexure boasts that it can predict what day a given customer is getting paid on and use that information to raise prices on all the goods the customer shops for on that day, on the assumption that you're willing to pay more when you've got a healthy bank balance.
The surveillance pricing industry represents another reason for everything you use to spy on you – any data your "smart" TV or Nest thermostat or Ring doorbell can steal from you can be readily monetized – just sell it to a surveillance pricing company, which will use it to figure out how to charge you more for everything you buy, from rent to Happy Meals.
But the vast market for surveillance data is also a potential weakness for the industry. Put frankly: the commercial surveillance industry has a lot of enemies. The only thing it has going for it is that so many of these enemies don't know that what's they're really upset about is surveillance.
Some people are upset because they think Facebook made Grampy into a Qanon. Others, because they think Insta gave their kid anorexia. Some think Tiktok is brainwashing millennials into quoting Osama bin Laden. Some are upset because the cops use Google location data to round up Black Lives Matter protesters, or Jan 6 insurrectionists. Some are angry about deepfake porn. Some are angry because Black people are targeted with ads for overpriced loans or colleges:
And some people are angry because surveillance feeds surveillance pricing. The thing is, whatever else all these people are angry about, they're all angry about surveillance. Are you angry that ad-tech is stealing a 51% share of news revenue? You're actually angry about surveillance. Are you angry that "AI" is being used to automatically reject resumes on racial, age or gender grounds? You're actually angry about surveillance.
There's a very useful analogy here to the history of the ecology movement. As James Boyle has long said, before the term "ecology" came along, there were people who cared about a lot of issues that seemed unconnected. You care about owls, I care about the ozone layer. What's the connection between charismatic nocturnal avians and the gaseous composition of the upper atmosphere? The term ecology took a thousand issues and welded them together into one movement.
That's what's on the horizon for privacy. The US hasn't had a new federal consumer privacy law since 1988, when Congress acted to ban video-store clerks from telling the newspapers what VHS cassettes you were renting:
We are desperately overdue for a new consumer privacy law, but every time this comes up, the pro-surveillance coalition defeats the effort. but as people who care about conspiratorialism, kids' mental health, spying by foreign adversaries, phishing and fraud, and surveillance pricing all come together, they will be an unbeatable coalition:
Not every federal agency has gotten the message, though. Trump's Fed Chairman, Jerome Powell – whom Biden kept on the job – has been hiking interest rates in a bid to reduce our purchasing power by making millions of Americans poorer and/or unemployed. He's doing this to fight inflation, on the theory that inflation is being cause by us being too well-off, and therefore trying to buy more goods than are for sale.
But of course, interest rates are inflationary: when interest rates go up, it gets more expensive to pay your credit card bills, lease your car, and pay a mortgage. And where we see the price of goods shooting up, there's abundant evidence that this is the result of greedflation – companies jacking up their prices and blaming inflation. Interest rate hawks say that greedflation is impossible: if one company raises its prices, its competitors will swoop in and steal their customers with lower prices.
Maybe they would do that – if they didn't have a toolbox full of algorithmic twiddling options and a deep trove of surveillance data that let them all raise prices together:
Someone needs to read some Adam Smith to Chairman Powell: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
