Legislation would protect consumers from personalized price manipulation

State Rep. Steve Frisbie (R-Pennfield) has announced legislation to prohibit surveillance pricing in Michigan, protecting consumers from companies that use personal data to charge different customers different prices for the same products and services.

Surveillance pricing uses information such as a consumer’s browsing history, purchase history, location data, demographics, and online behavior, to predict how much an individual is willing to pay and then tailor prices accordingly. Rather than setting prices based on supply, demand, or market conditions, surveillance pricing allows companies to use personal information to maximize profits at the expense of consumers. Recent findings from the Federal Trade Commission indicate some companies are using extensive personal data to influence the prices and promotions consumers see online.

“Michigan families are already battling rising costs everywhere they look. That’s why we must ensure they’re treated fairly when they shop,” Frisbie said. “People shouldn’t have to wonder whether they’re paying more than someone else simply because of the data a company has collected about them. The price of a product should depend on the product itself, not on how much a corporation thinks it can squeeze out of your wallet.”

Federal regulators have raised concerns that surveillance pricing technologies can use data such as a consumer’s location, demographics, browsing patterns, shopping history, and other behavioral information to customize prices and promotions for individual consumers. Investigators have also found that some pricing systems can incorporate information as granular as mouse movements, online searches, and items left in a shopping cart.

Frisbie said the practice undermines transparency in the marketplace and erodes consumer trust by creating a system where identical products may carry different prices for different people.

“People assume that when they see a price, everyone else sees that same price, and that should be a safe assumption” Frisbie said. “But surveillance pricing turns that expectation upside down. In the American free market, companies should compete by offering better products and better prices — not by harvesting personal data and using it to determine who can be charged more.”

Concerns surrounding surveillance pricing have drawn attention from lawmakers and consumer advocates across the country, who warn the practice raises serious privacy, fairness, and consumer protection issues. Critics argue that consumers are often unaware their personal information may be influencing the prices they see and that algorithm-driven pricing systems can create hidden discrimination.

Frisbie is urging his legislative colleagues to act before the practice becomes more widespread.

“There should be legal penalties in place to deter companies from using personal information to determine individualized pricing,” Frisbie said. “And that’s what this plan would establish.”

House Bills 6098-99 were referred to the House Regulatory Reform Committee for consideration.