Are Prices Being Set Based on Your Personal Data & AI? The Ethics of Surveillance Pricing

As we rely more on digital services, the use of personal data to set prices is becoming increasingly common. A recent FTC Surveillance Pricing Study revealed that businesses are now using vast amounts of personal consumer information—such as browsing history, location, and purchasing habits—to set tailored prices. While this technology promises more relevant and personalised pricing, it raises serious ethical concerns. Could this be a form of exploitation? Or is it a tool for good?

James D. Wilton, an expert in SaaS pricing and founder of Monevate, believes the issue is complex. “On the one hand, price differentiation is among the most important and powerful concepts in pricing, and the ability to improve it represents a large opportunity,” he explains. For businesses, tailoring prices to individual consumers can enhance the shopping experience, making it more relevant and efficient. However, as Wilton points out, “On the other hand, these AI- and ML-based techniques certainly open the door wider for non-ethical price differentiation which should NOT be the goal, and obviously must be clamped down upon.”

So, what’s the problem with surveillance pricing? The risk comes when businesses take advantage of consumers by using their data to set higher prices for those they believe can pay more. This opens the door to manipulation, particularly if the consumer is unaware of how their data is being used to influence pricing.

But Wilton is clear that surveillance pricing itself isn’t inherently bad: “It does create a lot of room for misuse and unethical behaviour which should be safeguarded against.” The key here is balancing innovation with fairness. Businesses need to use AI-driven pricing responsibly, ensuring they don’t exploit consumers in the process.

For businesses, there’s a huge opportunity in personalising pricing—but only if done ethically. For consumers, it’s essential to ask how your data is being used and whether you’re being charged a fair price. As the market continues to shift towards AI and machine learning, both sides will need to work together to ensure this technology benefits everyone—without crossing the line into unfair or discriminatory practices.

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