The best solution is a constitutional amendment that actually enshrines a right to privacy. Among other things, the retention, aggregation, correlation of any personal data should be illegal (including for commercial purposes). (Storage on behalf of users in encrypted form could be made OK. Could also be refined to support retention of data of the medical, legal, etc kind with the attendant non-admissibility protections.)
This would fix this issue, it would destroy the surveillance models of Google/Facebook, and it would fix the Flock issue, etc. It would also fix the Roe v Wade issue: women would be able to get abortions in the first couple months of pregnancy without the possibility of harassment, since law enforcement would have no capacity to detect pregnancy until then.
You can have privacy and an institution can collect data.
HIPAA is an example of that.
All personal data should be treated with at or near HIPAA levels of security. If I give my personal information to my bank, or google, that's fine for them to look at it, but it's not ok if that information magically lands in the hands of Coca Cola for marketing.
Yes, mostly, but google shouldn't be able to "look" at it either. No entity should be able to derive a commercial benefit from my data; any commercial value of my own data should accrue entirely to me.
You could build a test: the company should not be able to derive any additional value from 100 fully anonymized interactions with the same person as from 100 interactions with a deanonymized individual. Google obviously fails this test since targeted advertising is much more valuable if you have non-anonymized entities.
The doctor can store my data because it is necessary to provide me with the service, but the doctor shouldn't be able to sell my data, nor correlate it with their other patients' data.
Of course, a doctor will learn from treating me and become a better doctor, so you can't actually enforce this totally in practice. But it's like porn - you know when you see the violation.
Let me get it straight. You want to be able to engage with a commercial entity, but you don't want that commercial entity to be able to look at anything that results from you interacting with them? That doesn't even sound like a good user experience. I want the companies I engage in business with to be able to look at the data within the confines of our relationship and be able to do useful things with it.
If you don't want Google to be able to do anything at all with information you put into their system, easy, don't open an account!
I can agree with some of the other points, Google shouldn't be hoovering up mountains of data, etc. Just have to be careful of extremes. If you enshrine something bad in something as difficult to change as a constitution, you're stuck with it, and all your unintended consequences, potentially forever. You say "you can't actually enforce this totally in practice" but have you ever met a law firm? They would absolutely take the most extreme possible interpretation and milk all of society for billions a year if they can find an appropriate avenue.
This kind of extremism is what derailed some constitutional reforms in South America over the past decade. It started with reasonable center-left people saying some reasonable things, the radical left seized the process and wrote the final draft and faced with a choice between insanity and an unsatisfactory status quo people made the only palatable choice.
Your argument applies to the grocery pricing situation: "if you don't want the grocery store to aggregate all of your interactions, don't shop there".
All aspects of the commercial transaction should be clear and transparent: I give the grocery store cash, it gives me food. My data shouldn't be taken from me, and nor should I have to consent to my data to be taken from me in order to shop there.
Google can store and serve me my data. It cannot use my data for commercial purposes that do not directly serve me. Nor should it be able to aggregate my interactions in a way that serves to increase its own profit, as this, over time, increases the relative power of the firm.
Would it? The 1st is a prohibition on the rights of government, not private parties. Would the new amendment apply to the government, or to private sector, or to individuals? In any case, the 1st and the 28th? would continually be butting heads, since the 1st prohibits congress from passing laws that would enforce the 28th (and by extension, the states via the 14th). Would a newspaper be allowed to publish unflattering personal, privacy violating details? Would you be allowed to put up a political flyer alleging the same? I'm not sure an amendment is _the best solution_.
This is impossible is you consider the financial sector - any kind of unsecured private lending like mortgages become dead in the water, fraud detection goes out the window, money laundering, etc.
Good points, but there should be partial solutions. For example, you can present data about the consumer in order to decide on the mortgage, but once the transaction is complete, the data should disappear. You need something akin to "the data can be used only for the particular purpose of the transaction at hand, and the data must be wholly necessary for the transaction at hand."
We also know that mortgage lenders use irrelevant---well, scratch that---protected data to make decisions (i.e. discriminatory). Race for example is not supposed to be used in lending decisions.
Fraud detection can probably be solved by other reasonable means. And in any case, if you take the fraud argument to the limit, then you'd end up advocating for constant surveillance to prevent fraud. Equifax, Experian, and Transunion are all horrible companies who do their ostensible job minimally well, while maximizing the exploitation of the data of the people.
Cool thought but until violating the said constitution actually has enforceable consequences it’s not more than a paper tiger.
Take for instance the 2nd amendment. It is constantly under siege by government officials, both elected and appointed, as well as an activist judicial. Thankfully the SCOTUS has been somewhat successful in parlaying these incursions but someday the perpetrators will succeed, and I think mainly because there are no consequences for trying.
> until violating the said constitution actually has enforceable consequences it’s not more than a paper tiger. [...] Take for instance the 2nd amendment.
That seems like an exceptionally tepid constitutional violation to pick, after the last several years of massively-worse and flagrant violations.
Are you offering it because you think it represents something typical, and current events will prove to be an extreme outlier?
> The gun lobby’s interpretation of the Second Amendment is one of the greatest pieces of fraud, I repeat the work fraud, on the American people by special interest groups that I have seen in my lifetime. The real purpose of the Second Amendment was to ensure that state armies—the militia—would be maintained for the defense of the state. The very language of the Second Amendment refutes any argument that it was intended to guarantee every citizen an unfettered right to any kind of weapon he or she desires.
Sounds like you have been a victim of fraud. At least according to a former Chief Justice of the US Supreme Court. To prevent more people falling prey to fraudsters, Justice Stevens recommends that this amendment should be repealed - https://www.nytimes.com/2018/03/27/opinion/john-paul-stevens...
> "Chief Justice of the US Supreme Court. To prevent more people falling prey to fraudsters, Justice Stevens recommends that this amendment should be repealed"
I think you might be missing a sentence or a citation there, because Stevens was an associate justice, never the chief on SCOTUS.
Amen, I've ranted on HN about that a few times. [0] There is zero question that the Second Amendment was created as limit on the federal government interfering with individual states, and did not bar any state from whatever policy they chose for themselves. (Also, at that time, every state was already mandated by mutual treaty to have a "well-regulated militia" with state-appointed officers and state-funding, so the term had existing meaning.)
Whether that narrow scope is/should-be still true is trickier given the 14th amendments, although I believe it was wrongly included in the incorporation doctrine. [1]
[0] I know Google-search scoped to HN used to find them, and today it doesn't. The enshittification continues, is it time for me to start slowly scraping my own comment-history?
Why is this limited to groceries? I don't want to pay a different price than others for any category of item, not just groceries.
Should gyms be able to charge me more based on my weight? Should airlines charge me more because they know I need to travel urgently? Should pharmacies charge me more for medication because they know I have a chronic condition? Should an online retailer charge me more because my browsing history suggests I'm willing to pay a premium? Should insurance companies charge me more because they know I'm unlikely to shop around?
> If I'm selling to the wealthiest zip code, where the median house price is over $10M, should I be disallowed to charge higher prices?
I think so, because perhaps your costs to distribute those products is more too. But what I don't think you should be able to do is say, well your house was $50mm and your house was $1mm so you pay much more. Or you're wearing Air Force Ones so maybe your price is just a little more wink wink. It's a bit like hyper-targeted advertising versus general advertising.
> If I'm posting something for sale on Craigslist, and I don't put a price, is it OK if I quote different prices to different people who text me?
I think so as well. I don't see a problem with this - you don't know anything (maybe besides a green/blue text) anything about the buyer, how much they make, &c.
Not comparable. The markets can still charge wherever they want, but it needs to be priced per item and not per customer. In your house counterexample, you could set whatever list price you want.
you already do pay a price difference for many categories of items, insurance is a big one... where you live, how old you are, gender, etc
it used to be the norm with health insurance until the ACA dropped discrimination for chronic conditions
airlines charge more if you're too large to fit your seat
online retailers very often charge people more, there are hundreds of factors now... but one funny case was mac users getting redirected to more expensive hotels by travel sites
car insurers will raise premiums for people who haven't switched recently, I had to switch every 6 months for a couple years until one of them just stopped hiking prices around renewal
dynamic pricing is very very prevalent, but doing it on food (like health insurance before it) is particularly egregious
There is charging more because your costs are higher (most of your examples), then there is charging more because of opportunism. Insurance is customized because the costs are higher. That's fine.
Taking advantage of your personal circumstances that is unrelated to cost to charge you more--especially when it is hidden from you--is what is bad and should be illegal.
> airlines charge more if you're too large to fit your seat
I don't think this is a good example, because you're literally using more of the product that's being sold. I get where you're coming from but this one doesn't seem to really reinforce the point you are trying to make. It's like selling by weight or something if you wanted to compare it to groceries.
> The bill also permits a vast array of discounting practices while requiring increased transparency around discounts and placing some limitations on how consumers can be profiled.
The issue isn't "hey, you gave me a custom price that was disadvantageous". The issue is that "you gave me the regular price for some item but gave discounts to other people". That's trickier to outlaw because the "bad price" is the regular price, not a special discounted price.
If businesses are behaving badly, what they're doing is setting high regular prices and then discounting items that they don't think you'd otherwise buy. For items that you buy all the time, they're giving you minimal or no discounts.
But if you tell them they can't do this profiling, then they'll presumably resort to some mix of (1) no discounts with slightly lower overall pricing or (2) some loss leaders but otherwise regular pricing.
It's not especially clear to me that in the long run this is much better for consumers. They might get slightly more consumer surplus, but I doubt it will make that much of a difference. People in a given area probably have fairly similar buying patterns, plus they can still use loyalty programs, student/senior discounts/etc., as well as traditional coupons, to let customers sort themselves into "I'm generally price conscious" and "my time is worth more than my money".
It can never be better for consumers. The only way a business would adopt this practice is if it leads to greater revenues. On average, that necessarily means worse prices for the average consumer.
> But if you tell them they can't do this profiling, then they'll presumably resort to some mix of (1) no discounts with slightly lower overall pricing or (2) some loss leaders but otherwise regular pricing.
That's not true. Competition with other market participants should in theory (assuming competition) be sufficient. The firms are in general already charging the profit-maximizing price. They could, however, increase profits with more information.
But there is the additional problem that they will also monetize this information by selling it into advertising markets. The whole point of this business model is to capture previously uncaptured value that would otherwise have been shared in the commons.
> It can never be better for consumers. The only way a business would adopt this practice is if it leads to greater revenues. On average, that necessarily means worse prices for the average consumer.
That depends on the distribution of consumer incomes. Price discrimination (charging people more who can afford more) can be good for low-income customers.
If you somehow arrange for a redistributive effect. But in practice, the firms are likely to charge each consumer the maximum that consumer can afford. These firms are not engaging in some philanthropic process here.
If you want redistribution, implement a wealth tax.
Are there any examples of markets where price discrimination is good for the average consumer? Airline travel is the one that pops to mind - first class customers pay well above marginal cost and effectively subsidize the cattle class, right?
In the long run it would be strange for this to be the case, no? What are the economic forces that give rise to this? Maybe sometimes recessions affect poorer people more, and first class tickets smooth out revenues?
But in the long run, we've seen a steady worsening of the economy experience as airlines have invested in improved first class experiences. In the long run it's simply impossible for a firm to serve poor people (they have no money), absent interventions that allocate buying power to the poor person, or others that force the firm to do so.
>It can never be better for consumers. The only way a business would adopt this practice is if it leads to greater revenues. On average, that necessarily means worse prices for the average consumer.
Not necessarily. Look at airlines for example, which make heavy use of price discrimination. This allows them to offer a lower economy price to people who have less money, while subsidizing the flight by charging a higher price to business or luxury travelers.
If they were only allowed to offer one type of ticket at one price, it would mostly benefit richer passengers while pricing the poorest passengers out of air travel.
Stores already have that in the form of having cheaper and more expensive products in the same category (for example, 5 different brands of tomato sauce).
The practice that needs to be outlawed is invisible and per customer pricing. It would be the airline for the same class of seat charging different amounts because, for example, their profile of the flier shows they recently searched for "casket" and so they are likely heading to a family funeral.
It would be as if the airline for their economy class offered the flight for $1000 if you don't play, $600 to attract customers into buying, and $800 if they find their customer is desperate. All for the same seat.
They already do charge different prices for the same seat, based on their assessment of the type of passenger you are.
You've picked an "evil" example, but what price discrimination really tends to look like is charging richer people more.
Prices are generally lowered for poor people because they'd rather have your $300 than have an empty seat. If you don't have $800, no amount of desperation will make you pay it - you'll just miss the funeral.
> If they were only allowed to offer one type of ticket at one price, it would mostly benefit richer passengers while pricing the poorest passengers out of air travel.
Nobody is saying you can’t have different classes of service or product offerings. But if I’m buying a banana or you’re buying it, it’s the still a banana.
Different air travelers can pay very different prices for the same seat.
Airlines can't directly tell how much money a customer has, so they find indirect proxies.
Business travelers (reimbursed by their employer and thus not very price-sensitive) have identifiable patterns. They prefer particular flights on particular days of the week, tend to buy tickets close to date of travel, etc. Airlines exploit this to charge them higher prices.
If two consumers purchase the same item at the same time, it should be the same price. That's what we're debating. If an airline raises prices closer to departure, then that's not a violation of privacy, nor discriminatory in the sense we're discussing here.
I do, however, object to firms aggregating any individual's purchases across different interactions. That data should belong solely to the individual and it should be illegal to retain enough information to aggregate interactions across interactions with the same customer.
I have a club card account with a fake name on it. While they may track the purchase I make and know that a single person made them all, it's not attached to anything that is linked to me. My understanding is that they can't link credit card numbers to purchases, they can only use the number to run the transaction.
It's not great they track purchasing, but if it's not linked to me I don't really care that much.
Many grocery stories were also experimenting with digital signage that is dynamic as well. So many not individually profiled but at level of hours/neighborhood. They are trying to bring it where they can.
Kroger's delivery service wasn't that bad at all, it was fantastic actually.
Of course, some things are too good to be true, they apparently lost hundreds of millions of dollars on the effort before closing it down earlier this year. At least they did in my area in January, my understanding is they ended it everywhere they didn't have a physical store presence.
Is that assuming Instacart/DoorDash? Click and collect or even delivery from grocery stores isn't nearly that bad, right? I thought it was pretty competitive.
For a lot of people their time and their effort is worth more to them than their money unless it is something they particularly enjoy doing themselves.
In this bill it just lists grocery stores as one of the examples where this practice could be banned, I wonder if it would apply to other more general online storefronts such as amazon.
Because passing laws without limits is what leads to unintended consequences. For example, should algorithmic pricing of car insurance be banned? Should universities be banned from offering financial aid to lower-wealth students?
> Should universities be banned from offering financial aid to lower-wealth students?
Yes, that is transparently a scam that let's them set the price to "whatever you've got (or could access via loans)." That is exactly the type of thing that should be banned.
Wealth redistribution should be a transparent government policy, not individualized pricing, which makes it impossible for anyone to know ahead of time what anything costs, completely destroying any ability to plan or even have a meaningful concept of money.
Insurance makes more sense to have different factors for premiums, but the market would likely function much better if their algorithms were required to be public.
At least in some cases, that would likely have the effect of making college education less accessible to poorer people. The richer people are currently subsidizing the poorer people; if you disallow that and have everyone pay the average, the richer students would pay less, but the poorer students would be priced out entirely. I think that would end up being a net negative for society.
(I agree the U.S. university pricing system as it stands is far from perfect.)
Because I'm a bit lazy/busy, is there a summary that covers things like shopper cards/discount cards/membership requirements, and if this allows businesses to find different means of escape from the rules.
This is great news, but a bit surprising. I think, truth be told, the socialist left would like nothing better than to have surveillance pricing, so long as it is deployed in the aid of poor people. And of course the designation "surveillance pricing" would have to go. Something like "equity pricing" would have a much better ring to it.
Does anyone know how authority on passing these kinds of rules go, and if they are enforceable?
Is there some state/federal law that delegates power over some things to the municipalities/cities/counties etc that allow them passing ordnance like this?
It feels weird to me that this would not be a state / federal level decision, but maybe that's just my Finnish ass.
My understanding is that in typical Seattle fashion, this is a new legal requirement with zero funding or staffing to implement and enforce it. If you feel you have been wronged, hire an attorney and sue.
The constitution generally, at both the federal level and state levels generally has a clause like "if its not enumerated here then the next division down has the right to regulate it" hence why the feds regulate interstate commerce, but not state internal commerce. This usually stops at the county level, not the city level, but large cities are effectively their own counties so that distinction doesnt matter much.
Its enforceable in that the city has a police department and zoning rights. So they can force businesses out for violating the law, and they have they have the monopoly of violence within the city to make sure you follow their directions. But whether thats funded or practicable depends on other factors.
The best solution is a constitutional amendment that actually enshrines a right to privacy. Among other things, the retention, aggregation, correlation of any personal data should be illegal (including for commercial purposes). (Storage on behalf of users in encrypted form could be made OK. Could also be refined to support retention of data of the medical, legal, etc kind with the attendant non-admissibility protections.)
This would fix this issue, it would destroy the surveillance models of Google/Facebook, and it would fix the Flock issue, etc. It would also fix the Roe v Wade issue: women would be able to get abortions in the first couple months of pregnancy without the possibility of harassment, since law enforcement would have no capacity to detect pregnancy until then.
Also, tech won't save us had a podcast on the dynamic pricing topic: https://podcasts.apple.com/us/podcast/how-data-is-changing-a...
This is simply untenable. Institutions of all kinds have been keeping records connected to individuals for millennia.
Try to run a school when you can’t maintain data on the students.
You can have privacy and an institution can collect data.
HIPAA is an example of that.
All personal data should be treated with at or near HIPAA levels of security. If I give my personal information to my bank, or google, that's fine for them to look at it, but it's not ok if that information magically lands in the hands of Coca Cola for marketing.
Yes, mostly, but google shouldn't be able to "look" at it either. No entity should be able to derive a commercial benefit from my data; any commercial value of my own data should accrue entirely to me.
You could build a test: the company should not be able to derive any additional value from 100 fully anonymized interactions with the same person as from 100 interactions with a deanonymized individual. Google obviously fails this test since targeted advertising is much more valuable if you have non-anonymized entities.
The doctor can store my data because it is necessary to provide me with the service, but the doctor shouldn't be able to sell my data, nor correlate it with their other patients' data.
Of course, a doctor will learn from treating me and become a better doctor, so you can't actually enforce this totally in practice. But it's like porn - you know when you see the violation.
Let me get it straight. You want to be able to engage with a commercial entity, but you don't want that commercial entity to be able to look at anything that results from you interacting with them? That doesn't even sound like a good user experience. I want the companies I engage in business with to be able to look at the data within the confines of our relationship and be able to do useful things with it.
If you don't want Google to be able to do anything at all with information you put into their system, easy, don't open an account!
I can agree with some of the other points, Google shouldn't be hoovering up mountains of data, etc. Just have to be careful of extremes. If you enshrine something bad in something as difficult to change as a constitution, you're stuck with it, and all your unintended consequences, potentially forever. You say "you can't actually enforce this totally in practice" but have you ever met a law firm? They would absolutely take the most extreme possible interpretation and milk all of society for billions a year if they can find an appropriate avenue.
This kind of extremism is what derailed some constitutional reforms in South America over the past decade. It started with reasonable center-left people saying some reasonable things, the radical left seized the process and wrote the final draft and faced with a choice between insanity and an unsatisfactory status quo people made the only palatable choice.
Your argument applies to the grocery pricing situation: "if you don't want the grocery store to aggregate all of your interactions, don't shop there".
All aspects of the commercial transaction should be clear and transparent: I give the grocery store cash, it gives me food. My data shouldn't be taken from me, and nor should I have to consent to my data to be taken from me in order to shop there.
Google can store and serve me my data. It cannot use my data for commercial purposes that do not directly serve me. Nor should it be able to aggregate my interactions in a way that serves to increase its own profit, as this, over time, increases the relative power of the firm.
It's not - GDPR does that and it could even be much stricter still and we'd be fine.
Would it? The 1st is a prohibition on the rights of government, not private parties. Would the new amendment apply to the government, or to private sector, or to individuals? In any case, the 1st and the 28th? would continually be butting heads, since the 1st prohibits congress from passing laws that would enforce the 28th (and by extension, the states via the 14th). Would a newspaper be allowed to publish unflattering personal, privacy violating details? Would you be allowed to put up a political flyer alleging the same? I'm not sure an amendment is _the best solution_.
But that will absolutely never happen, the country is more corrupt than it has ever been and doesn’t care one bit about citizens concerns
This is impossible is you consider the financial sector - any kind of unsecured private lending like mortgages become dead in the water, fraud detection goes out the window, money laundering, etc.
Good points, but there should be partial solutions. For example, you can present data about the consumer in order to decide on the mortgage, but once the transaction is complete, the data should disappear. You need something akin to "the data can be used only for the particular purpose of the transaction at hand, and the data must be wholly necessary for the transaction at hand."
We also know that mortgage lenders use irrelevant---well, scratch that---protected data to make decisions (i.e. discriminatory). Race for example is not supposed to be used in lending decisions.
Fraud detection can probably be solved by other reasonable means. And in any case, if you take the fraud argument to the limit, then you'd end up advocating for constant surveillance to prevent fraud. Equifax, Experian, and Transunion are all horrible companies who do their ostensible job minimally well, while maximizing the exploitation of the data of the people.
And?
Cool thought but until violating the said constitution actually has enforceable consequences it’s not more than a paper tiger.
Take for instance the 2nd amendment. It is constantly under siege by government officials, both elected and appointed, as well as an activist judicial. Thankfully the SCOTUS has been somewhat successful in parlaying these incursions but someday the perpetrators will succeed, and I think mainly because there are no consequences for trying.
Just an example and JMHO.
> until violating the said constitution actually has enforceable consequences it’s not more than a paper tiger. [...] Take for instance the 2nd amendment.
That seems like an exceptionally tepid constitutional violation to pick, after the last several years of massively-worse and flagrant violations.
Are you offering it because you think it represents something typical, and current events will prove to be an extreme outlier?
Honestly it is the one that came to mind as I am apparently a victim of fraud.
More seriously though what good is a constitution if it can be violated without repercussions?
You and I do agree on one thing though but I would adjust that to being the last 40 years rather than just several.
> The gun lobby’s interpretation of the Second Amendment is one of the greatest pieces of fraud, I repeat the work fraud, on the American people by special interest groups that I have seen in my lifetime. The real purpose of the Second Amendment was to ensure that state armies—the militia—would be maintained for the defense of the state. The very language of the Second Amendment refutes any argument that it was intended to guarantee every citizen an unfettered right to any kind of weapon he or she desires.
Sounds like you have been a victim of fraud. At least according to a former Chief Justice of the US Supreme Court. To prevent more people falling prey to fraudsters, Justice Stevens recommends that this amendment should be repealed - https://www.nytimes.com/2018/03/27/opinion/john-paul-stevens...
> "Chief Justice of the US Supreme Court. To prevent more people falling prey to fraudsters, Justice Stevens recommends that this amendment should be repealed"
I think you might be missing a sentence or a citation there, because Stevens was an associate justice, never the chief on SCOTUS.
https://en.wikipedia.org/wiki/John_Paul_Stevens
Amen, I've ranted on HN about that a few times. [0] There is zero question that the Second Amendment was created as limit on the federal government interfering with individual states, and did not bar any state from whatever policy they chose for themselves. (Also, at that time, every state was already mandated by mutual treaty to have a "well-regulated militia" with state-appointed officers and state-funding, so the term had existing meaning.)
Whether that narrow scope is/should-be still true is trickier given the 14th amendments, although I believe it was wrongly included in the incorporation doctrine. [1]
[0] I know Google-search scoped to HN used to find them, and today it doesn't. The enshittification continues, is it time for me to start slowly scraping my own comment-history?
[1] https://www.law.cornell.edu/wex/incorporation_doctrine
Once people manage to bypass the 2nd Amendment, the next one to go will be free speech.
Why is this limited to groceries? I don't want to pay a different price than others for any category of item, not just groceries.
Should gyms be able to charge me more based on my weight? Should airlines charge me more because they know I need to travel urgently? Should pharmacies charge me more for medication because they know I have a chronic condition? Should an online retailer charge me more because my browsing history suggests I'm willing to pay a premium? Should insurance companies charge me more because they know I'm unlikely to shop around?
If I'm selling to the wealthiest zip code, where the median house price is over $10M, should I be disallowed to charge higher prices?
If I'm posting something for sale on Craigslist, and I don't put a price, is it OK if I quote different prices to different people who text me?
I can see arguments both ways.
> If I'm selling to the wealthiest zip code, where the median house price is over $10M, should I be disallowed to charge higher prices?
I think so, because perhaps your costs to distribute those products is more too. But what I don't think you should be able to do is say, well your house was $50mm and your house was $1mm so you pay much more. Or you're wearing Air Force Ones so maybe your price is just a little more wink wink. It's a bit like hyper-targeted advertising versus general advertising.
> If I'm posting something for sale on Craigslist, and I don't put a price, is it OK if I quote different prices to different people who text me?
I think so as well. I don't see a problem with this - you don't know anything (maybe besides a green/blue text) anything about the buyer, how much they make, &c.
Not comparable. The markets can still charge wherever they want, but it needs to be priced per item and not per customer. In your house counterexample, you could set whatever list price you want.
you already do pay a price difference for many categories of items, insurance is a big one... where you live, how old you are, gender, etc
it used to be the norm with health insurance until the ACA dropped discrimination for chronic conditions
airlines charge more if you're too large to fit your seat
online retailers very often charge people more, there are hundreds of factors now... but one funny case was mac users getting redirected to more expensive hotels by travel sites
car insurers will raise premiums for people who haven't switched recently, I had to switch every 6 months for a couple years until one of them just stopped hiking prices around renewal
dynamic pricing is very very prevalent, but doing it on food (like health insurance before it) is particularly egregious
There is charging more because your costs are higher (most of your examples), then there is charging more because of opportunism. Insurance is customized because the costs are higher. That's fine.
Taking advantage of your personal circumstances that is unrelated to cost to charge you more--especially when it is hidden from you--is what is bad and should be illegal.
> airlines charge more if you're too large to fit your seat
I don't think this is a good example, because you're literally using more of the product that's being sold. I get where you're coming from but this one doesn't seem to really reinforce the point you are trying to make. It's like selling by weight or something if you wanted to compare it to groceries.
The devil is really in the details:
> The bill also permits a vast array of discounting practices while requiring increased transparency around discounts and placing some limitations on how consumers can be profiled.
The issue isn't "hey, you gave me a custom price that was disadvantageous". The issue is that "you gave me the regular price for some item but gave discounts to other people". That's trickier to outlaw because the "bad price" is the regular price, not a special discounted price.
If businesses are behaving badly, what they're doing is setting high regular prices and then discounting items that they don't think you'd otherwise buy. For items that you buy all the time, they're giving you minimal or no discounts.
But if you tell them they can't do this profiling, then they'll presumably resort to some mix of (1) no discounts with slightly lower overall pricing or (2) some loss leaders but otherwise regular pricing.
It's not especially clear to me that in the long run this is much better for consumers. They might get slightly more consumer surplus, but I doubt it will make that much of a difference. People in a given area probably have fairly similar buying patterns, plus they can still use loyalty programs, student/senior discounts/etc., as well as traditional coupons, to let customers sort themselves into "I'm generally price conscious" and "my time is worth more than my money".
It can never be better for consumers. The only way a business would adopt this practice is if it leads to greater revenues. On average, that necessarily means worse prices for the average consumer.
> But if you tell them they can't do this profiling, then they'll presumably resort to some mix of (1) no discounts with slightly lower overall pricing or (2) some loss leaders but otherwise regular pricing.
That's not true. Competition with other market participants should in theory (assuming competition) be sufficient. The firms are in general already charging the profit-maximizing price. They could, however, increase profits with more information.
But there is the additional problem that they will also monetize this information by selling it into advertising markets. The whole point of this business model is to capture previously uncaptured value that would otherwise have been shared in the commons.
> It can never be better for consumers. The only way a business would adopt this practice is if it leads to greater revenues. On average, that necessarily means worse prices for the average consumer.
That depends on the distribution of consumer incomes. Price discrimination (charging people more who can afford more) can be good for low-income customers.
If you somehow arrange for a redistributive effect. But in practice, the firms are likely to charge each consumer the maximum that consumer can afford. These firms are not engaging in some philanthropic process here.
If you want redistribution, implement a wealth tax.
Are there any examples of markets where price discrimination is good for the average consumer? Airline travel is the one that pops to mind - first class customers pay well above marginal cost and effectively subsidize the cattle class, right?
In the long run it would be strange for this to be the case, no? What are the economic forces that give rise to this? Maybe sometimes recessions affect poorer people more, and first class tickets smooth out revenues?
But in the long run, we've seen a steady worsening of the economy experience as airlines have invested in improved first class experiences. In the long run it's simply impossible for a firm to serve poor people (they have no money), absent interventions that allocate buying power to the poor person, or others that force the firm to do so.
>It can never be better for consumers. The only way a business would adopt this practice is if it leads to greater revenues. On average, that necessarily means worse prices for the average consumer.
Not necessarily. Look at airlines for example, which make heavy use of price discrimination. This allows them to offer a lower economy price to people who have less money, while subsidizing the flight by charging a higher price to business or luxury travelers.
If they were only allowed to offer one type of ticket at one price, it would mostly benefit richer passengers while pricing the poorest passengers out of air travel.
Stores already have that in the form of having cheaper and more expensive products in the same category (for example, 5 different brands of tomato sauce).
The practice that needs to be outlawed is invisible and per customer pricing. It would be the airline for the same class of seat charging different amounts because, for example, their profile of the flier shows they recently searched for "casket" and so they are likely heading to a family funeral.
It would be as if the airline for their economy class offered the flight for $1000 if you don't play, $600 to attract customers into buying, and $800 if they find their customer is desperate. All for the same seat.
They already do charge different prices for the same seat, based on their assessment of the type of passenger you are.
You've picked an "evil" example, but what price discrimination really tends to look like is charging richer people more.
Prices are generally lowered for poor people because they'd rather have your $300 than have an empty seat. If you don't have $800, no amount of desperation will make you pay it - you'll just miss the funeral.
> If they were only allowed to offer one type of ticket at one price, it would mostly benefit richer passengers while pricing the poorest passengers out of air travel.
I'm sold, how do we put this in the Constitution?
Nobody is saying you can’t have different classes of service or product offerings. But if I’m buying a banana or you’re buying it, it’s the still a banana.
Different air travelers can pay very different prices for the same seat.
Airlines can't directly tell how much money a customer has, so they find indirect proxies.
Business travelers (reimbursed by their employer and thus not very price-sensitive) have identifiable patterns. They prefer particular flights on particular days of the week, tend to buy tickets close to date of travel, etc. Airlines exploit this to charge them higher prices.
If two consumers purchase the same item at the same time, it should be the same price. That's what we're debating. If an airline raises prices closer to departure, then that's not a violation of privacy, nor discriminatory in the sense we're discussing here.
I do, however, object to firms aggregating any individual's purchases across different interactions. That data should belong solely to the individual and it should be illegal to retain enough information to aggregate interactions across interactions with the same customer.
In the end this made news about how the surveillance economy works and should further freak people out about it. This helps long term I think.
I have a club card account with a fake name on it. While they may track the purchase I make and know that a single person made them all, it's not attached to anything that is linked to me. My understanding is that they can't link credit card numbers to purchases, they can only use the number to run the transaction.
It's not great they track purchasing, but if it's not linked to me I don't really care that much.
Unfortunately AI will get better and better at circumventing your security by obfuscation. The best use of AI is surveillance.
Has buying groceries online been normalized to this extent? I still feel dirty about it, but maybe I’m too old fashioned.
A lot of grocery chains let you order online. They'll pack it for you and you simply drive there and pick up (they'll bring to your car).
Many grocery stories were also experimenting with digital signage that is dynamic as well. So many not individually profiled but at level of hours/neighborhood. They are trying to bring it where they can.
Depends on what you mean. I can buy groceries directly through the grocer instead of a middleman like DoorDash. I would count that as online.
Seriously, once you realize you’re paying a minimum of 30% extra, it becomes hard to stomach.
Kroger's delivery service wasn't that bad at all, it was fantastic actually.
Of course, some things are too good to be true, they apparently lost hundreds of millions of dollars on the effort before closing it down earlier this year. At least they did in my area in January, my understanding is they ended it everywhere they didn't have a physical store presence.
Is that assuming Instacart/DoorDash? Click and collect or even delivery from grocery stores isn't nearly that bad, right? I thought it was pretty competitive.
Walmart, for example, maintains in-store pricing, but charges a $95/year membership fee and you tip the driver.
For a lot of people their time and their effort is worth more to them than their money unless it is something they particularly enjoy doing themselves.
Will Seattle City council also implement one parking fee for all neighborhoods and times of day?
They won't implement surveillance pricing for parking fees, if that's what you meant to say.
Link to the bill: https://seattle.legistar.com/LegislationDetail.aspx?ID=81665...
In this bill it just lists grocery stores as one of the examples where this practice could be banned, I wonder if it would apply to other more general online storefronts such as amazon.
Actually, why even limit what it applies to
Because passing laws without limits is what leads to unintended consequences. For example, should algorithmic pricing of car insurance be banned? Should universities be banned from offering financial aid to lower-wealth students?
> Should universities be banned from offering financial aid to lower-wealth students?
Yes, that is transparently a scam that let's them set the price to "whatever you've got (or could access via loans)." That is exactly the type of thing that should be banned.
Wealth redistribution should be a transparent government policy, not individualized pricing, which makes it impossible for anyone to know ahead of time what anything costs, completely destroying any ability to plan or even have a meaningful concept of money.
Insurance makes more sense to have different factors for premiums, but the market would likely function much better if their algorithms were required to be public.
At least in some cases, that would likely have the effect of making college education less accessible to poorer people. The richer people are currently subsidizing the poorer people; if you disallow that and have everyone pay the average, the richer students would pay less, but the poorer students would be priced out entirely. I think that would end up being a net negative for society.
(I agree the U.S. university pricing system as it stands is far from perfect.)
Because I'm a bit lazy/busy, is there a summary that covers things like shopper cards/discount cards/membership requirements, and if this allows businesses to find different means of escape from the rules.
from the bill:
> “Algorithmic-based price discrimination” does not include:
> 5. The covered retailer offers a discounted price on equal terms to one of the following groups of consumers:
> c. Members, enrollees, or participants in a loyalty, membership, including cooperative memberships, or rewards program [...]
This is great news, but a bit surprising. I think, truth be told, the socialist left would like nothing better than to have surveillance pricing, so long as it is deployed in the aid of poor people. And of course the designation "surveillance pricing" would have to go. Something like "equity pricing" would have a much better ring to it.
Does anyone know how authority on passing these kinds of rules go, and if they are enforceable?
Is there some state/federal law that delegates power over some things to the municipalities/cities/counties etc that allow them passing ordnance like this?
It feels weird to me that this would not be a state / federal level decision, but maybe that's just my Finnish ass.
My understanding is that in typical Seattle fashion, this is a new legal requirement with zero funding or staffing to implement and enforce it. If you feel you have been wronged, hire an attorney and sue.
That's not as good as auditing the books of grocers, but it's better than permitting surveillance pricing.
The constitution generally, at both the federal level and state levels generally has a clause like "if its not enumerated here then the next division down has the right to regulate it" hence why the feds regulate interstate commerce, but not state internal commerce. This usually stops at the county level, not the city level, but large cities are effectively their own counties so that distinction doesnt matter much.
Its enforceable in that the city has a police department and zoning rights. So they can force businesses out for violating the law, and they have they have the monopoly of violence within the city to make sure you follow their directions. But whether thats funded or practicable depends on other factors.