by Samuel Leitch
Do rideshare companies charge you more if your phone is about to die? The trending Internet rumor, based in part on a fabricated screenshot posted to Reddit, is ultimately unproven.1 However, it serves as an example of a real-world practice called surveillance pricing, which companies use every day in the era of big data.
In a recent study, the FTC found 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.”2 Data collected from browser cookies, data brokers, and other sources can determine how much more willing you are to purchase a given product or service—and, consequently, how much more you might be charged.
Since these algorithms are proprietary, the full extent to which companies adjust individual prices is unknown, but there are several examples. Analysis by ProPublica found that The Princeton Review was twice as likely to offer Asian people a higher price for SAT courses.3 Meanwhile, Kroger might be using facial recognition to profile customers and change electronic price labels in real time.4 Surveillance pricing appears everywhere from hotels to airlines: if there’s a price involved, it can be adjusted through surveillance pricing.
In their analysis of SB 259, the Assembly Committee on Privacy and Consumer Protection wrote that surveillance pricing is an “example of perfect price discrimination… [where] the difference between what a consumer is willing to pay and what they actually pay disappears.”5 Instead, customers pay the exact maximum amount they are willing to pay. That amount, whatever it may be, depends on factors like the customer’s age, socioeconomic status, or simply how desperate that person might be at that moment.
This is not to be confused with dynamic pricing. While dynamic pricing might inflate a price according to real-time demand, such as when customers purchase a last-minute plane ticket before Thanksgiving, surveillance pricing uses personal data to offer an individualized price for a product or service.
SB 259, also known as the Fair Online Pricing Act, was one of two bills introduced in the California state legislature that would have prohibited surveillance pricing, the other being AB 446. In the end, neither bill was signed into law, facing heavy opposition from organizations such as the California Chamber of Commerce and Chamber of Progress.
SB 259
Of the two proposed bills, SB 259 was the more narrow prohibition. It targeted price setting practices that are based in whole or in part on certain pieces of device information: the device’s hardware or hardware state, the presence or absence of software on the device, and the device’s geolocation data. Hardware state refers to information including current battery life, operating system, and device age. Meanwhile, geolocation data is anything that helps reveal the user’s current location, such as cell tower or Wi-Fi access point data.
Despite these restrictions, companies would be permitted to use hardware state to calculate the cost of a device’s repairs or offer a trade-in value. Geolocation data would also be permitted in order to calculate real-time demand in cases where the product or service is provided immediately upon request, such as food delivery or rideshare services, or to calculate local fees like state taxes.
SB 259 was ordered to the inactive file and did not become law.
AB 446
Meanwhile, AB 446 would have prohibited grocery establishments from offering an increased price to a customer or group of customers through electronic surveillance technology. While the final revision of AB 446 targeted grocery stores, however, earlier versions of AB 446 applied to everyone. This bill would not have applied to discounts, creating exceptions for discounts offered through a rewards program or mailing list, discounts offered to groups like veterans or students, or situations where a customer knowingly consents to disclosing publicly identifiable information.
AB 446 was ordered to the inactive file and did not become law.
Opposition
Spanning industries from banking to advertising, a broad coalition of associations opposed both SB 259 and AB 446. Several common themes stand out between the letters of opposition submitted against both bills.
One argument was that the structure of these bills would impede progress and hurt profits. In a letter of opposition against an unamended version SB 259, the coalition wrote, “A law that imposes a broad prohibition on the use of certain data—while carving out only narrow exceptions…chills innovation.”6 In their view, very narrow prohibitions that single out specific predatory marketing practices are preferable to broad prohibitions. These opponents argue that the latter framework is inflexible and unfair, that it forces companies to rework entire marketing practices, and that it cannot adapt to future innovations, some of which might be beneficial for consumers.
Opponents wrote that not all uses of personally identifiable data are predatory and that, in some cases, companies might even use demographic data to offer discounts and affordable prices to marginalized communities. Even after AB 446 was amended to explicitly single out price increases, not discounts, this concern persisted. If anything, low-income shoppers tend to get the short end of the stick in reality: for example, a recent investigation by the Wall Street Journal found that online retailers like The Home Depot or Staples tend to charge customers less if they browse from high-income areas.7
Lastly, opponents argued that SB 259 undermines the California Privacy Rights Act, arguing that the latter contains narrow, fine-tuned, and voter-approved prohibitions that the former jeopardizes. However, the Senate Judiciary committee argued that this is not the case: in cases where it conflicts with another law, the CPRA designates control to whichever law allows for greater privacy protections for consumers. Therefore, the CPRA is written for amendments exactly like SB 259.
Opponents also argued that the CPRA already covers surveillance pricing and that, under these protections, customers can simply opt out. This conflicts with bill analysis done by the Senate Judiciary committee, which found that there is likely no existing legal framework in California that addresses surveillance pricing.
The Assembly Committee for Privacy and Consumer Protection wrote that while SB 259 is not a privacy bill so much as a consumer protection bill, it is similar to data privacy protections in other states: while the CPRA requires consumers to affirmatively opt out the sale and sharing of personal data, 16 other states require that consumers must opt in before this can occur—privacy being the default. In this way, SB 259 and AB 446 could have addressed surveillance pricing for Californians. While they failed to become law, they point to a future where exploitative data practices are not the norm.
1 Joey Esposito, “Uber Increases Prices for Customers with Low Phone Batteries?,” Snopes (Snopes.com, November 18, 2024), https://www.snopes.com/fact-check/uber-phone-surge-pricing/.
2 FTC, “FTC Surveillance Pricing Study Indicates Wide Range of Personal Data Used to Set Individualized Consumer Prices,” Federal Trade Commission, January 17, 2025, https://www.ftc.gov/news-events/news/press-releases/2025/01/ftc-surveillance-pricing-study-indicates-wide-range-personal-data-used-set-individualized-consumer.
3 Julia Angwin, Jeff Larson, and Surya Mattu, “The Tiger Mom Tax: Asians Are Nearly Twice as Likely to Get a Higher Price from Princeton Review,” ProPublica, September 1, 2015, https://www.propublica.org/article/asians-nearly-twice-as-likely-to-get-higher-price-from-princeton-review.
4 Mayu Tobin-Miyagi, “Kroger’s Surveillance Pricing Harms Consumers and Raises Prices, with or without Facial Recognition,” EPIC – Electronic Privacy Information Center, 2025, https://epic.org/krogers-surveillance-pricing-harms-consumers-and-raises-prices-with-or-without-facial-recognition/.
5 Cal. Assemb. Comm. Privacy and Consumer Protection, “Fair Online Pricing Act,” July 24, 2025. https://leginfo.legislature.ca.gov/faces/billAnalysisClient.xhtml?bill_id=202520260SB259
6 Cal. Assemb., “Fair Online Pricing Act,” Sept. 9, 2025. https://leginfo.legislature.ca.gov/faces/billAnalysisClient.xhtml?bill_id=202520260SB259
7 Jennifer Valentino-DeVries, “Websites Vary Prices, Deals Based on Users’ Information,” WSJ (Wall Street Journal, December 24, 2012), https://www.wsj.com/articles/SB10001424127887323777204578189391813881534.