FTC Report Reveals Widespread Use of "Surveillance Pricing" by Major Retailers

Federal investigation finds companies charging different prices based on personal data, with 250+ businesses using targeted pricing algorithms

By [Reporter Name]
Published: June 11, 2025

A new Federal Trade Commission investigation has exposed the widespread use of "surveillance pricing" by major retailers and online platforms, revealing how companies systematically charge different customers different prices for identical goods and services based on personal data collection.

The FTC's preliminary findings, released in January 2025, show that retailers frequently use consumers' location data, browsing history, purchase patterns, and even mouse movements to set individualized prices designed to extract maximum profits from each customer.

What is Surveillance Pricing?

Unlike traditional dynamic pricing that adjusts costs based on supply and demand, surveillance pricing uses personal data to determine how much a specific individual is willing to pay. The practice involves companies using advanced algorithms, artificial intelligence and other technologies, along with personal information about consumers—such as their location, demographics, credit history, and browsing or shopping history—to categorize individuals and set a targeted price for a product or service.

The Federal Trade Commission's initial findings revealed that details like a person's precise location or browser history can be frequently used to target individual consumers with different prices for the same goods and services. Staff found that consumer behaviors ranging from mouse movements on a webpage to the type of products that consumers leave unpurchased in an online shopping cart can be tracked and used by retailers to tailor consumer pricing.

FTC Investigation Findings

The FTC issued orders in July 2024 to eight companies offering surveillance pricing products and services, including Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co. The FTC found that as many as 250 different businesses, including grocery stores, apparel, health and beauty retailers, convenience stores, building and hardware stores, and department and discount stores, use consumer information to help target prices, profile consumers or rank products that are shown to shoppers.

"Firms that harvest Americans' personal data can put people's privacy at risk. Now firms could be exploiting this vast trove of personal information to charge people higher prices," said FTC Chair Lina M. Khan.

The investigation found that companies can determine pricing based on factors including:

Precise geographic location
Device type and operating system
Browsing and purchase history
Demographics and inferred characteristics
Time spent on websites
Items left in shopping carts

Documented Cases of Surveillance Pricing

Target

The Target app charged people $100 more for a t.v. when a person was in a Target parking lot versus when in another location because it appeared to determine people would pay higher prices the closer they were to the store. Target location services affects the app's listed prices, with the app changing the price once you get to the store. Target ultimately agreed to pay $5 million in civil penalties over these practices.

Staples

Staples.com charged people more for the same stapler if they knew a person had fewer options, such as not being physically near a competitor. Staples.com charged people more for the same stapler if it knew a person had fewer options, such as being near a competitor.

Amazon

Amazon alone changes prices millions of times a day. Amazon's prowess in dynamic pricing is unparalleled, with the marketplace giant adjusting its product prices a remarkable 2.5 million times each day. While Amazon has denied using customer demographics for pricing, the company's vast data collection enables sophisticated price targeting.

Travel and Hospitality

Orbitz learned that Mac users spend more money to stay at hotels and charged them more than non-Mac users. Hotel booking sites charged people in certain ZIP Codes more money to stay at hotels than other ones across the country.

Grocery Store Surveillance

The investigation has placed particular focus on grocery chains, where surveillance pricing could impact essential goods. Every time you step into a grocery store, you step into a machinery of data that tracks, analyzes, shares, and influences your shopping behavior.

Kroger, the nation's largest grocery chain, has faced scrutiny for its plans to implement electronic shelf labels (ESLs) combined with facial recognition technology. Kroger and other retailers already use electronic shelving labels instead of paper labels to rapidly adjust prices based on a variety of factors, including time of purchase, where a grocery store is located and other data.

In partnership with Microsoft, Kroger plans to place cameras on its EDGE Shelf displays and use facial recognition to determine information about its shoppers, including gender and age, to push personalized offers and advertisements.

Technology Enabling Surveillance Pricing

Electronic shelf labels have become a key technology enabling real-time price adjustments in brick-and-mortar stores. Electronic shelf labels (ESLs) are small screens that replace paper price labels in stores, allowing grocers to change prices in mere seconds rather than having employees physically change the paper price tags. The integration of ESLs with data collection technologies introduces serious privacy implications. Retailers may collect biometric data, such as facial scans, without obtaining proper consent.

Legislative Response

Several states are moving to ban or regulate surveillance pricing practices:

California

California has advanced AB 446, which would prohibit retailers from "offering or setting a customized price for a good or service for a specific consumer or group of consumers, based, in whole or in part, on covered information collected through electronic surveillance technology".

Massachusetts

The Massachusetts Senate advanced a bill this week that would prevent grocers from charging different prices based on shoppers' biometric data, like fingerprints, faceprints, or voice.

New York

New York state passed a requirement that any businesses using data-driven personalized prices must post the disclaimer: "This price was set by an algorithm using your personal data".

Industry Impact and Concerns

The practice raises significant concerns about fairness and discrimination. Studies show that poorer people are charged more. A study of broadband internet offers to 1.1 million residential addresses showed the worst deals given to the poorest people.

Staff found that some 6(b) respondents can determine individualized and different pricing and discounts based on granular consumer data, like a cosmetics company targeting promotions to specific skin types and skin tones.

Future of FTC Investigation

The FTC's study remains ongoing, though its future under the new Republican leadership is uncertain. The new FTC chairman, installed by Donald Trump, is Andrew Ferguson, a Big Law alumni who defended large companies from antitrust cases and opposed consumer gains such as the commission's non-compete ban. He opposed releasing the pricing study.

The commission is seeking public comments on surveillance pricing practices through April 17, 2025, as it continues to investigate how these practices affect consumers and competition.

Consumer Protection Recommendations

Consumer advocacy groups recommend several measures to protect against surveillance pricing:

Use VPNs to mask location and browsing data
Disable location services on shopping apps
Compare prices across different devices and browsers
Support legislation requiring transparency in algorithmic pricing

The FTC investigation represents the first comprehensive federal examination of how personal data is being weaponized to extract higher prices from consumers, with implications for privacy rights, fair commerce, and economic equality.

Consumer Countermeasures Against Surveillance Pricing

Protecting yourself from algorithmic price discrimination requires a multi-layered approach

As surveillance pricing becomes increasingly prevalent, consumers are not powerless. Here's a comprehensive guide to the most effective countermeasures against data-driven price manipulation, ranked by effectiveness and ease of implementation.

High-Effectiveness Countermeasures

1. Virtual Private Networks (VPNs)

Effectiveness: High | Ease of Use: Medium

A VPN hides your IP address and encrypts your internet traffic, making it harder for ISPs, websites, and malicious surveillance systems to track you. VPNs are particularly effective against location-based pricing discrimination.

How it works:

Masks your real IP address and geographic location
Encrypts all internet traffic
Prevents companies from using location data to adjust pricing

Best practices:

Choose reputable paid VPN services like NordVPN, Surfshark, or Proton VPN
Avoid free VPN services due to limitations and privacy concerns
Costs approximately $3-12 per month for quality services

Limitations:

While effective against browsing history tracking, it's not possible to obfuscate VPN use itself
Won't protect against tracking when you're logged into accounts

2. Multiple Device/Browser Price Comparison

Effectiveness: High | Ease of Use: High

Compare prices across different devices to spot potential price differences. This simple technique can reveal when surveillance pricing is in effect.

How to implement:

Check the same product on your phone, laptop, and tablet
Use different browsers (Chrome, Firefox, Safari)
Test both mobile apps and desktop websites
Perform multiple searches on different devices and browsers to see if there is any change in price

3. Regular Cookie Clearing

Effectiveness: Medium-High | Ease of Use: High

Clearing the cookies from your device regularly limits the ability to track your online behavior because the data has been deleted.

Implementation:

Clear cookies weekly or after each shopping session
Tracking cookies store information about your online browsing activity, including IP address and location
Use browser settings to automatically delete cookies on exit

Medium-Effectiveness Countermeasures

4. Private/Incognito Browsing

Effectiveness: Medium | Ease of Use: High

Your browsing history and personal data aren't saved when browsing in Incognito mode. However, this protection has significant limitations.

Benefits:

Prevents local storage of browsing history
Websites won't be able to serve ads to you based on your signed-out activity during that closed session

Major limitations:

While it prevents your local device from storing your browsing history, it does not hide your identity from websites, internet service providers (ISPs), trackers, or malicious surveillance
Does not prevent your activity or location from being visible to websites you visit and the services they use
Websites can use browser fingerprinting to identify users even in private mode

5. Ad Blockers and Tracker Blockers

Effectiveness: Medium | Ease of Use: Medium

Ad blockers can prevent some forms of tracking, but require manual setup for private browsing modes.

Popular options:

uBlock Origin
AdBlock Plus
Privacy Badger
With a paid Proton VPN account, our NetShield Ad-blocker DNS filtering feature will protect you against a range of tracker scripts

Setup requirements:

In Chrome, Firefox and Microsoft Edge, extensions don't always run in private or incognito mode by default. You may need to enable them
Must manually enable extensions for incognito/private mode
Almost every single one of them blocks trackers and not just ads; not to mention that the vast majority of ads serve as tracking tools, too

6. Disabling Location Services

Effectiveness: Medium | Ease of Use: High

Turn off location services on your mobile apps. Click "no" when a browser app asks to use your location data.

Implementation:

Disable GPS/location access for shopping apps
Refuse location permission requests from websites
Be aware that IP-based location tracking may still occur

Low-Effectiveness Countermeasures

7. Price Tracking Tools

Effectiveness: Low-Medium | Ease of Use: High

While helpful for monitoring price changes, these tools don't prevent surveillance pricing but can help you identify when it occurs.

Use cases:

Savvy shoppers can use price tracking tools to monitor fluctuations and time their purchases accordingly
Identify unusual pricing patterns
Track historical price data

8. Privacy-Focused Browsers

Effectiveness: Medium | Ease of Use: Medium

Privacy-focused browsers like Brave or Tor offer enhanced protection, but may impact usability.

Options:

Brave Browser (built-in ad blocking)
Tor Browser (maximum anonymity but slower)
Firefox with privacy extensions

Advanced Protection Strategies

Multi-Tool Approach

For maximum protection, combine multiple countermeasures:

Primary defense: Use a reputable VPN service
Secondary protection: Clear cookies regularly and disable location services
Shopping strategy: Compare prices across multiple devices and browsers
Enhanced privacy: Use privacy-focused browsers with ad blockers enabled

Shopping-Specific Tips

Before making purchases:

Take screenshots of prices before traveling to stores
Turn off your Location Services before you head out when using retailer apps
Check prices in private browsing mode
Compare online and in-store pricing

Account management:

Log out of retailer accounts when price shopping
Use different email addresses for price comparison
Avoid saving payment information in retailer accounts

Effectiveness Reality Check

Important limitations to understand:

You are tracked in countless other ways, including browser fingerprinting, your IP address, and advertising IDs. It's difficult to detect or avoid surveillance pricing entirely, especially if you use mobile apps that can access a huge amount of your personal data.

"The bigger issue is that individuals shouldn't have to outsmart an opaque system just to get fair treatment and transparent pricing. This is where regulation needs to step in" - privacy expert Maureen Mezzatesta.

The Bottom Line

While no single countermeasure provides complete protection against surveillance pricing, a combination of VPN usage, regular cookie clearing, multi-device price comparison, and privacy-conscious browsing can significantly reduce your exposure to algorithmic price discrimination. The most effective approach is to make yourself a "harder target" by limiting the personal data available to pricing algorithms, while supporting legislative efforts to regulate these practices at the systemic level.

Sources

Federal Trade Commission. (2024, July 23). "FTC Issues Orders to Eight Companies Seeking Information on Surveillance Pricing." https://www.ftc.gov/news-events/news/press-releases/2024/07/ftc-issues-orders-eight-companies-seeking-information-surveillance-pricing
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Federal Trade Commission. (2025, January 17). "Surveillance Pricing." https://www.ftc.gov/news-events/features/surveillance-pricing
Federal Trade Commission. (2025, January 17). "Surveillance Pricing Update & The Work Ahead." https://www.ftc.gov/policy/advocacy-research/tech-at-ftc/2025/01/surveillance-pricing-update-work-ahead
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