Target's Algorithmic Pricing Raises Consumer Concerns
Retail
Pricing
Algorithms
Data Privacy
Target
New York Law
AI
Surveillance Pricing
8
Data Shadows
Media Hype
7/10
Real Impact
8/10
What is the Viqus Verdict?
We evaluate each news story based on its real impact versus its media hype to offer a clear and objective perspective.
AI Analysis:
While the revelation is not entirely unprecedented, the convergence of a new state law, FTC investigation, and increased media attention elevates the significance of this news. The risk of further regulation and consumer awareness creates a higher long-term impact.
Article Summary
Target’s pricing practices have come under renewed attention following the revelation that prices for items like eggs and toilet paper vary significantly depending on a customer’s location. A new website disclosure states that prices are set by an algorithm utilizing personal data. This practice, confirmed by the company’s long-standing use of location-based pricing, is now subject to a recently enacted New York State law requiring businesses to disclose algorithmic pricing. While not illegal, the practice raises concerns about transparency and potential manipulation. Target has long associated itself with its local market prices, but this new disclosure confirms the active role of algorithms. The company’s location-based pricing isn’t entirely new, having been identified by The Huffington Post in 2021 and confirmed in a 2022 settlement with California district attorneys. Furthermore, the FTC is currently investigating ‘surveillance pricing’ and similar practices, and states are beginning to introduce legislation to regulate algorithmic pricing. The company’s recent foray into ChatGPT further underscores its embrace of AI and automated decision-making. Despite the concerns, the practice isn't new and doesn't violate existing laws, but the new disclosure and regulatory attention could force greater transparency and potentially reshape retail pricing strategies.Key Points
- Target uses algorithms to adjust prices based on customer location, as revealed by a recent website disclosure.
- A new New York State law requires businesses to disclose algorithmic pricing based on customer data, introducing a new layer of regulatory oversight.
- The practice of location-based pricing is not new, having been previously identified by news outlets and subject to lawsuits and regulatory investigations.