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Seattle City Council votes to ban surveillance pricing in sale of groceries

Seattle City Council votes to ban surveillance pricing in sale of groceries

ortusdux

Comments (108)

  • jsrozner
    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...
  • apparent
    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".
  • flowerlad
    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?
  • vadansky
    Has buying groceries online been normalized to this extent? I still feel dirty about it, but maybe I’m too old fashioned.
  • ortusdux
  • dabinat
    I’m most concerned about data that would normally be illegal to collect or give to advertisers still making its way into their databases anyway. It would be illegal for your doctor to sell details about your health conditions to advertisers, but they may be able to infer it anyway from your purchasing or search data.Add AI to the mix and it gets worse. An AI algorithm instructed to maximize profits may charge double for a chocolate bar to someone it inferred was diabetic, but AI is non-deterministic so it would be difficult to prove the reasoning for its decision, which would be handy for plausible deniability.And the government being able to purchase data that it would be illegal for it to gather is a massive and glaring loophole. The actions of the Trump Administration should make it obvious to everyone how massive databases with intimate and personal details could be weaponized.
  • kazinator
    Will Seattle City council also implement one parking fee for all neighborhoods and times of day?
  • SoftTalker
    I think it's fine to allow it but if you're going to price things based on the individual buyer, you then should be forced to accept counter offers. Make everything negotiable.$5.00 for a gallon of milk? No, I'll give you $2.50. Back and forth until you find a mutually agreeable price.
  • emilfihlman
    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.
  • foota
    Economic background: profit maximizing businesses would like to extract the most value out of every transaction. Not everyone derives the same value from the same thing. E.g., someone might be willing to pay $5 for a burger, whereas others might only pay $4. Price too high and you lose the people that will only pay (or can only afford) less. Price too low and you don't charge people as much as they would have been willing to pay and lose out on profit. The economic POV is that voluntary transactions happen because both sides benefit (or at least don't lose out) or they wouldn't happen. Therefore every voluntary transaction produces some economic benefit in the form of producer and consumer surplus. The amount of these is determined by the gap between the price and the consumer's WTP (willingness to pay, i.e., the highest price they would be willing to pay) and the price and the producer's WTA (willingness to accept, i.e., the lowest price they would accept at). Together these form the economic surplus of a transaction.Profit maximizing businesses want to capture as much of the economic surplus of transactions as possible by optimizing the price they charge. When businesses offer a single price their ability to do so is limited because some people with a lower WTP that is still above the producers WTA don't elect to purchase and on the flip side some people who have a higher WTP would be willing to pay more and don't.To increase their profits therefore businesses can attempt to do what's referred to as "price discrimination" which is when they offer different prices to people based on the person's perceived WTP (there are different means of doing so, such as geographically based pricing, etc.,) and when they offer exactly the customer's WTP to every unique customer it's called perfect price discrimination, because they're capturing the entire value of all transactions.In competitive markets, businesses ability to price discriminate is reduced, but not entirely eliminated.Now... this surveillance pricing is basically a form of price discrimination. However, the interesting part is that while price discrimination in net is beneficial for businesses, it actually can also benefit lower income/lower WTP consumers by allowing them to buy at a lower price (since they wouldn't have bought at a higher price -- both the consumer and the business benefit here) but hurts customers with a higher income/WTP since the business can charge them more.This is interesting because this is a somewhat rare regressive (hurts lower income people more than higher income people) anti-business policy. Generally, I think most anti-business policies are also progressive (well, except for the idiotic ones like broad tariffs) but in this case banning the ability of price discrimination through personalized pricing hurts businesses and lower income people while benefiting higher income people (the surveillance aspect of it could be thought of as an externality, which hurts everyone).If you're highly anti-surveillance you might argue that it's net positive for everyone because lower income people wouldn't be surveilled in the same way (well, at least it wouldn't be applied, I don't think it would actually change the surveillance side of things) but that requires a normative position on whether surveillance is bad.In theory this policy could probably be made non-redistributive (benefitting higher and lower income people equally) by adding a grocery tax that would be used to offset the impact to lower income people, but in practice it seems like it would be difficult to administer (especially in Seattle, which doesn't collect city taxes from people directly today, not to mention the opportunities for arbitrage).
  • anon
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  • pmdulaney
    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.