The Price Is You: How AI learned to charge each person the maximum they'll tolerate
February 26, 2026
The Price Is You
How AI learned to charge each person the maximum they’ll tolerate
On January 27, California’s attorney general announced an investigative sweep into companies that use your personal data to set individualized prices. Not dynamic pricing, where prices change based on supply and demand. Surveillance pricing. Where the price changes based on who you are.
The AG’s office wasn’t chasing a theory. A month earlier, Instacart settled with the FTC for $60 million over exactly this practice. The company had acquired an AI pricing firm called Eversight in 2022, and that firm’s core product was something called “Smart Rounding” — a system that ran real-time A/B tests on individual shoppers to find the highest price each person would pay before closing the tab.
Your phone model. Your zip code. Your browsing history. How fast you scrolled through alternatives. Whether you were on Wi-Fi or cellular data. Your battery level. All of it fed into a model that answered one question: how much can we charge this specific person right now?
How it actually works
Dynamic pricing is old. Airlines have done it for decades. But there was always a logic tied to the product. A seat closer to departure is worth more because supply is limited.
Surveillance pricing inverts this. The product doesn’t change. The supply doesn’t change. What changes is what the algorithm knows about you.
The asymmetry is total. When you walk into a physical store, you see one price on the shelf. Everyone sees that price. You can compare it to the store across the street. That transparency is the only reason markets function. Buyers and sellers both need to know what things cost.
Surveillance pricing destroys that. Two people sitting next to each other in the same coffee shop, buying the same item from the same app, will see different prices. Neither knows what the other is paying. Neither can comparison shop against the other’s price. The shared reference point that makes a market a market simply does not exist anymore.
The legislative dam breaks
Nine states introduced surveillance pricing bills in January and February 2026 alone. New York has advanced proposals ranging from outright bans to disclosure requirements. Senator Ruben Gallego introduced the “One Fair Price Act” at the federal level, which would bar companies from using personal data for individualized pricing.
California’s AG went further than legislation. He launched an active investigative sweep, essentially telling companies: we are looking at your pricing algorithms right now, not waiting for complaints.
This is a regulatory speed that almost never happens in tech. The gap between “we discovered companies are doing this” and “multiple state attorneys general are investigating” was measured in weeks, not years. Why?
Because surveillance pricing hits everyone, and it hits them in the wallet. Data collection is abstract. A company tracking your location feels creepy, but the harm is theoretical for most people. Surveillance pricing is concrete. You paid $14.99 for the same thing your friend paid $11.99 for, and the only reason is that an algorithm figured out you’d tolerate it. That is not a privacy argument. That is a fairness argument. And fairness arguments move faster.
The Google escalation
In February, Google introduced what it calls a “Shopping Protocol,” an AI system that compares prices across retailers for you. The stated goal is consumer convenience.
But here is the problem: for Google’s AI to compare your personal prices across retailers, it needs to see your personal prices across retailers. Which means Google’s system can also observe, and catalog, exactly how different companies price the same item for different people.
The tool that claims to protect you from surveillance pricing is itself a surveillance pricing observation deck.
This is the same pattern we keep seeing with age verification and content moderation: the solution to the surveillance problem is more surveillance. The fix requires the same infrastructure as the harm. A tool that compares personalized prices across retailers is, by definition, a tool that knows your personalized prices across retailers. That data has value. Someone will want to buy it. And if you don’t think they will, you have not been paying attention.
What this actually is
What I haven’t seen anyone spell out is this: surveillance pricing is not really a pricing strategy. It is what happens when the behavioral surveillance apparatus that already exists finds a new revenue stream.
The data pipelines were built for ad targeting and government intelligence. They profile your movements, your habits, your interests, your relationships. Now someone realized you can also use all that to figure out how much to charge for a bottle of shampoo.
The infrastructure was not built for pricing. Pricing is just the latest customer.
The infrastructure is already built. That is what makes this different from previous tech policy fights. When Congress debated social media regulation, the question was whether to impose new rules on existing platforms. With surveillance pricing, the question is whether to stop companies from monetizing data collection infrastructure they already paid for and are already using for half a dozen other things.
You cannot regulate the pricing without regulating the data collection. And nobody is regulating the data collection.
Where this goes
Consumer Reports published a study in January documenting how widespread this already is. It’s not a few bad actors. Surveillance pricing is becoming how online retail works.
The legislative response is real but fragmented. Nine states, multiple approaches, no federal standard. Companies can shop for jurisdictions. An algorithm that is illegal in New York can serve the same customer from a server in a state with no restrictions.
The most honest framing of where this goes: you will eventually either know what everyone else is paying, or you will know that you have no idea what anyone else is paying, and that the difference between those two outcomes is the entire history of consumer protection compressed into a single policy question.
I keep coming back to something simple: if I can’t see the same price you see, we’re not in a market anymore. We’re just being individually processed. And nobody asked us if we were okay with that.
Originally published at https://noahaust2.github.io/strategist-dashboard/blog/the-price-is-you.html
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