Why it Matters

Senators from both parties found common ground on August 4 in their opposition to surveillance pricing, a practice where companies use personal data to charge customers different prices for identical goods. Senators discussed the practice during the Senate Judiciary Subcommittee on Crime and Counterterrorism hearing titled 'Your Data, Their Profit: The Consumer Cost of AI Surveillance Pricing,' held on Tuesday.

The subcommittee's focus on surveillance pricing puts lawmakers at odds with the administration's broader AI policy framework. President Trump issued an executive order in January 2025 establishing that "it is the policy of the United States to sustain and enhance America's global AI dominance." A subsequent December 2025 order directed a whole-of-government effort to establish a future federal AI policy framework and to take steps to preempt conflicting state laws.

More recently, in June, Trump signed Executive Order 14409. The act, titled "Promoting Advanced AI Innovation and Security," focuses on accelerating AI product development and promoting U.S. dominance in the field.

The Big Picture

Personal data such as location and browsing history are commonly used to set individualized prices. The Federal Trade Commission's (FTC) market study, whose initial findings were released in January 2025, documented that companies frequently use such details to target individualized consumer prices. The FTC identified potential harms including consumer exploitation, privacy risks, data obfuscation, and discrimination.

The issue has escalated beyond academic concern into enforcement action. One case: in January,New York's Attorney General sent a letter to Instacart demanding answers from Instacart about its algorithmic pricing practices following a December 2025 study. The study assigned 437 shoppers across four cities to measure price disparities in real time, and following that investigation, Instacart announced it would end AI price experiments by grocery retailers on its platform.

State legislatures have begun moving as well. California introduced AB 2564 on February 20, which would prohibit retailers from engaging in surveillance pricing based on personally identifiable information.

Economic impact studies add urgency to the conversation: In July,Moody's Analytics chief economist Mark Zandi told CNN that households must spend just over $375 more annually to purchase the same goods and services as they did the previous year due to AI's inflationary impact.

What They're Saying

The hearing surfaced sharp disagreement over whether personalized pricing harms or helps consumers.

Lindsay Owens, CEO of the Groundwork Collaborative, testified that the hearing concerned "a simple, age-old principle: Americans deserve fair pricing." She warned that surveillance pricing is "coming for every line in the household budget, from groceries and gas to concert tickets and airfares."

The United Food and Commercial Workers (UFCW) union stated in testimony that "limits on surveillance pricing and electronic shelf labels will ensure that new technology supports workers and consumers and addresses the affordability issues working families face." UFCW International President Milton Jones said: "Americans are hurting under the affordability crisis, and UFCW members see the pain in their faces every time they enter the grocery store."

The American Consumer Institute, on the other hand, framed algorithmic pricing as beneficial in competitive markets, contending that legislative crackdowns could backfire. The institute argued that personalized pricing can actually benefit consumers through lower prices for some.

And the hearing revealed tension within Republican ranks. Chair Josh Hawley described AI-driven surveillance pricing as the "unholy trinity of everything Americans hate: spying on people, ripping them off, and taking away jobs." He added: "Big tech has reinvented the rip-off" and called the practice "one of the biggest scams in American history."

Yes, but: Critics of aggressive regulation argue that surveillance pricing, when used in competitive markets, drives efficiency and can lower prices for some consumers.A January 2026 legal analysis by Skadden Arps noted that algorithmic pricing decisions have largely favored defendants in courts so far, suggesting judicial skepticism toward broad restrictions.

The Bottom Line

Surveillance pricing has become the rare AI issue uniting Democrats and Republicans, but the Trump administration's deregulatory stance could complicate the path to federal restrictions.

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