It may sound entirely bizarre but the prices you once paid for hotels, educational classes, or staplers could have all been higher because you used a Mac computer, lived in a certain zip code, or lacked an Office Depot in your neighborhood.
No, really.
In 2012, The Wall Street Journal reported that the travel booking site Orbitz showed Mac users pricier hotel options than PC users, because the company had determined that Mac users spend, on average, 30% more a night on hotels. That same year, The Wall Street Journal (once again) reported that Staples.com showed higher prices to visitors who lived farther away from a competitor like Office Depot. And in 2015, the reporting outfit ProPublica revealed that customers in certain zip codes were shown higher prices for college test prep courses offered by The Princeton Review.
As that investigation found, if customers:
“type some zip codes into the company’s website, they are offered The Princeton Review’s premier course for as little as $6,600. For other zip codes, the same course cost as much as $8,400. One unexpected effect of the company’s geographic approach to pricing is that Asians are almost twice as likely to be offered a higher price than non-Asians.”
This is surveillance pricing put into action.
Under surveillance pricing, companies collect as much data as possible about consumers so that they can alter the literal prices those consumers pay for the exact same goods as everyone else. It is reportedly what caused some customers to see higher prices for televisions in the Target app when those customers were physically located in a Target parking lot. It is also allegedly why Home Depot customers in wealthy neighborhoods oddly paid less. And it is what Delta Airlines walked away from after public backlash.
The near-omnipresence of surveillance pricing is also why so many videos can be found online today that claim that minor alterations to a person’s data trail—like changing an IP address using a VPN or shopping for airline tickets on a public library’s computer—can lead to lower prices online.
The proof behind these claims, however, is harder to test.
Thankfully, one person has already tried.
Video journalist Chris Parr, known on YouTube as Chris the Producer, ran a wild experiment into whether he could “stress-test” surveillance pricing. Far beyond changing his IP address or making online purchases from different locations, Parr started from scratch. By first registering an LLC in the state of Wyoming, Parr granted that LLC both a credit card and a phone, effectively creating a brand new consumer persona to be tracked. But creating a realistic data trail for his LLC would require a little extra help—help that Parr received from an actor he hired for the part.
Today, on the Lock and Code podcast with host David Ruiz, we speak with Parr about his experiment into surveillance pricing, including a high-wire drone act to purchase a White Castle Crave Case in the air space above his home state’s wealthiest neighborhood:
“To the data collectors, they don’t know that this phone is floating in the air, like 200 feet in the air. They just see a geolocation on it.”
Tune in today to listen to the full conversation.
Show notes and credits:
Intro Music: “Spellbound” by Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 4.0 License
http://creativecommons.org/licenses/by/4.0/
Outro Music: “Good God” by Wowa (unminus.com)
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