In response to mounting concerns about the use of artificial intelligence (AI) to set individualized consumer prices and wages, lawmakers in Congress have unveiled a landmark proposal: the Stop AI Price Gouging and Wage Fixing Act of 2025. Sponsored by Rep. Greg Casar (D-Texas) and Rep. Rashida Tlaib (D-Mich.), the bill seeks to prohibit the use of personal data by companies to algorithmically determine prices and pay rates, a growing practice known as “surveillance pricing.”
What Is Surveillance Pricing?
Surveillance pricing refers to the use of AI and vast stores of consumer data—including browsing history, location, purchasing habits, and demographic details—to tailor prices on a per-customer basis. Unlike traditional pricing strategies based on supply and demand, surveillance pricing leverages individual data points to predict how much a consumer is willing or able to pay, raising widespread concerns about fairness and potential discrimination.
For example, AI-driven systems have reportedly been used to raise ride-share prices for users with low phone batteries and to present higher prices for essential goods to frequent online shoppers. Retailers are increasingly employing digital price tags and sophisticated analytics to dynamically alter in-store prices as well.
Key Provisions of the Proposed Legislation
The Stop AI Price Gouging and Wage Fixing Act would:
- Prohibit the Use of Personal Data for Pricing or Wage Setting: The bill bans companies from analyzing personal or sensitive user data to set individualized prices or wages. Routine practices, such as loyalty discounts, would be unaffected, as the legislation targets price and wage adjustments based specifically on private data analysis.
- Empower Federal and State Oversight: Agencies like the Federal Trade Commission (FTC), the Equal Employment Opportunity Commission, and state authorities would be granted broad enforcement powers.
- Enable Civil Enforcement: Private citizens would have the right to sue companies found to be engaging in unlawful AI-based price or wage manipulation.
Rationale and Industry Response
The push for new legislation follows a significant FTC report revealing that surveillance pricing is becoming widespread, facilitated by large companies across financial, retail, and technology sectors. The report highlighted that corporations—including Mastercard, JPMorgan Chase, Accenture, and McKinsey—use AI systems to process detailed consumer data in their pricing strategies.
Proponents argue that unchecked surveillance pricing exacerbates inequality, granting privileged consumers better deals while less affluent or more vulnerable individuals pay more or receive less competitive wages. Lawmakers and consumer advocates warn that, without regulation, such practices will undermine market fairness and erode public trust.
Legislative and Regulatory Context
Several states, including New York, have enacted laws requiring companies to disclose when algorithms are used to set prices. California is currently considering similar measures. On a federal level, related proposed legislation, such as the Preventing Algorithmic Collusion Act, aims to combat anti-competitive conduct achieved through AI-powered pricing collusion.
Real-World Examples
- Airline Industry: Major carriers have experimented with AI pricing models that adjust ticket prices based on an individual’s perceived willingness to pay.
- Rideshare Services: Platforms like Uber have faced scrutiny for potentially charging users with low phone batteries higher fares.
- Retail and Delivery Apps: Dynamic pricing and AI-driven wage calculations have been reported in both retail and delivery service sectors, sometimes to the detriment of less-informed or less-favored consumers and workers.
