Reed calls on Congress to ban AI-driven 'surveillance pricing'
At a Providence café, the Rhode Island Democrat argued that retailers should not be allowed to use shoppers' personal data to charge some customers more than others for the same product.
U.S. Sen. Jack Reed, D-R.I., on Friday urged Congress to ban what he called "exploitative AI-enabled price discrimination," in which retailers use personal data and artificial intelligence to charge different shoppers different prices for the same item.
Reed made the case during a visit to Bom Café in Providence, where he joined café owner Rosie Santana and Nina Harrison, policy director of the Economic Progress Institute, to discuss the practice, which his office described as "surveillance pricing" or "personal pricing."
"Consumers deserve transparent pricing and equal treatment, not hidden technology that misuses their personal data to set different prices for the same item and charge some shoppers more than others," Reed said.
Reed's office cited an investigation by Consumer Reports and Groundwork Collaborative that it said found grocery apps such as Instacart used AI-driven pricing experiments that raised some users' bills. According to the office, one shopper was charged $3.99 for a box of Wheat Thins while another at the same store at the same time paid $4.89. The office said such variations could amount to a $1,200-a-year swing in food costs for a typical household of four, based on Instacart's estimate of what such a household spends on groceries.
Reed said he would work across the aisle on a ban while ensuring companies could still offer targeted discounts, promotions, rewards, loyalty and membership benefits, and contextual pricing. He said that if lawmakers fail to act, online shoppers will face a greater risk of price gouging and data privacy threats.
Harrison pointed to the institute's 2026 Rhode Island Standard of Need report, which the group said shows nearly 40 percent of Rhode Island households may not have enough income to meet basic needs. "Rhode Islanders literally cannot afford to have surveillance pricing in this state," she said.
The release included no response from Instacart.
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