Pallone Launches Surveillance Pricing Inquiry

Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ) launched a new inquiry into corporate surveillance pricing practices today. The top Committee Democrat requested details in an initial round of letters to 25 major corporations, including information on whether they’re using surveillance pricing based on consumers’ personal data to charge customers different prices for the same goods, particularly for online shopping.  

“On top of tariffs jacking up prices for consumers, increasing inflation, and surging gas prices due to Trump’s reckless war of choice, Americans now have to worry their personal data may be used to charge them higher prices,” Pallone wrote in letters to the 25 major companies. “I am very concerned about companies potentially using Americans’ personal data to determine what prices they see and pay, and I am opening an inquiry into just how widespread this practice is.”

The Federal Trade Commission (FTC) defines surveillance pricing as a form of personalized dynamic pricing where companies use a consumer’s online data—location, demographics, browsing history, shopping habits, or device type—to set individualized prices, often charging higher amounts based on an inferred willingness to pay.

“Now, a growing number of companies are implementing or considering ‘surveillance pricing’ where they acquire extensive personal data about individual consumers and feed it into algorithms to curate different prices dependent on the customer,” Pallone continued in his letter. “What’s worse is that Americans are often unaware that the prices they are paying, particularly and most notably when shopping online, might have been set using their own personal data.” 

According to an investigation by Consumer Reports and Groundwork Collaborative, Instacart used an AI tool to conduct pricing tests for online shoppers so retailers could gauge shoppers’ reactions to higher or lower prices across a variety of products. Instacart described the practice as incredibly lucrative in a letter to a potential customer, noting that, “For some of our major grocery partners, this has led to millions of dollars in annual incremental sales.” In response, the FTC opened an investigation into Instacart’s surveillance pricing tactics. 

Pallone has long supported passing comprehensive data privacy legislation, noting in his letters the lack of a strong federal privacy standard appears to have created a regulatory gray area allowing surveillance pricing practices to surge. 

“These actions by companies also exploit the lack of comprehensive consumer privacy regulation,” Pallone continued in his letters to companies. “Existing federal law does not sufficiently protect Americans’ data from misuse or adequately address consumer privacy concerns in surveillance pricing.”  

Pallone vowed that these first round of letters is just the beginning of this inquiry, stating “Energy and Commerce Committee Democrats will be asking questions across industries in the coming months to get a full understanding of the scope of surveillance pricing and what needs to be done to address it.” 

In the letters, Pallone requested documentation from each of the companies as well as answers to a series of questions, including: 

• A list of all customer data elements collected by companies that are used to inform or set prices.
• How are the data elements the company collects or possesses about its customers used to inform or set prices?
• Does the company use AI or machine learning algorithms—either directly or through a third party—to inform or set prices?  
• Does the company purchase, license, or otherwise acquire data elements from any third party that are used in any way to inform or set prices for customers? 
• Are customers able to opt-out or revoke permission to collect or acquire data about them for the purpose of setting prices?  

Ranking Member Pallone sent the initial round of letters to the following 25 companies and requested answers by May 26, 2026: 

Albertsons

Aldi

Amazon

BJs

Costco

CVS

Dollar General

Dollar Tree

Family Dollar

Food Lion

Giant Food

Hannaford

H-E-B

Key Food

Kroger

Publix

Sam’s Club

ShopRite

Stop & Shop

Target

The Giant Company

Walgreens

Walmart

Wegmans

Whole Foods

Full text of the letter is available HERE.  

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