February 2025 Published byAI Now InstituteAmerican Economic Liberties ProjectCommonwealthCoworkerEPIC - Electronic Privacy Information CenterFuture of Workers InitiativeGroundwork CollaborativeNational Employment Law ProjectOpen Markets InstituteS.T.O.P. - Surveillance Technology Oversight ProjectState Innovation ExchangeTechEquityTowards JusticeVeena Dubal, Professor of Law, University of California, IrvineZephyr Teachout, Professor of Law, Fordham Law School Prohibiting SurveillancePrices and Wages1 Introduction........................................................................................................................................2I. Prevalence of Surveillance Prices and Wages.........................................................................4II. How Surveillance Price and Wage Setting Works.................................................................7III. Harms Caused by Surveillance Prices and Wages...............................................................9A.Surveillance Prices and Wages Threaten Personal Privacy, Freedom of Thought,and Freedom of Expression ................................................................................................... 9B.Surveillance Prices and Wages Exacerbate Systemic Discrimination .................. 10C.Surveillance Prices and Wages Facilitate and Mask Corporate Control ............... 11D.Surveillance Prices and Wages Transfer Wealth from People to PowerfulCorporations............................................................................................................................ 12E.Surveillance Prices and Wages Hurt Small Businesses and Give Large CorporatePowers a Competitive Advantage......................................................................................... 13IV. Current Legal Regimes Partially Address Surveillance Prices and Wages.................. 15A.Competition Law ............................................................................................................ 15B.Consumer Protection Laws........................................................................................... 17C.Privacy and Data Protection Laws ...............................................................................18D.Anti-discrimination Laws .............................................................................................18E.Other Worker Protection Laws ....................................................................................19F.Laws Protecting Free Speech and Political Associations ........................................ 20V. A Framework for Prohibiting Surveillance Prices and Wages.........................................21Endnotes............................................................................................................................................23 Introduction Last October, an explosive news report found that Kroger, one of the largestgrocery store chains in the United States,2was exploring the use of facialrecognition technology in its stores. Immediately, shoppers and publicofficials3worried that consumers’ faces might be used, along with otherintimate data, to deliver different prices for different consumers. The storytapped into a deep and understandable fear. Imagine walking into a grocerystore and seeing a price for milk that’s higher than what the next shopperpays because an algorithm calculated that you’re willing to spend morebased-on data regarding your shopping habits, financial vulnerability, socialmedia activity, or even subtle cues like your body language. The threat is real.4The Federal Trade Commission (FTC) published a first-ofits kind report on surveillance pricing last month, which details howcorporations can use vast quantities of personal data to set individualized prices for goods and services, exploiting consumers based on their uniquevulnerabilities and behaviors.5 Corporations collect information about where we go, what we watch, whatwe like, who we know, what food we buy, what videos our cursors linger over,and what loans we take out. Giant firms can run those data points throughalgorithms to set individualized prices and wages, rigging the market tocharge us as much as possible for goods and services and pay us as little aspossible for our work.6 This report explains how surveillance prices and wages work; what harmsthey may cause; and what legal tools are currently available to combatthem. It then calls on the states to act decisively and ban these practicesoutright. To do so, it introduces five core principles to guide futuregovernment action. I.Prevalence of Surveillance Prices and Wages The prevalence of surveillance prices and wages is difficult to measure, butthe technology to impose them is already widespread. Last month’s FTCreport summarized preliminary agency findings about third-partycompanies that market surveillance pricing tools to clients. The reportsuggests that surveillance pricing tools are being active