The Price Tag That Was Calculated Just For You

There is a long menu of things Rhode Islanders can blame for a grocery bill that keeps climbing — tariffs, egg supply, weather, the price of diesel, the fact that we live in a state with a lot of small stores and not much shelf space. Add one more to the list, and it's the one you can't see on the receipt: the possibility that the price you were shown was calculated for you.

That's the practice a U.S. Senate subcommittee spent Tuesday examining, and it's the practice two Rhode Island bills have been sitting on since March.

The hearing, titled "Your Data, Their Profit: The Consumer Cost of AI Surveillance Pricing," was convened by Sen. Josh Hawley, the Missouri Republican who chairs the Judiciary Subcommittee on Crime and Counterterrorism. "Big Tech has reinvented the ripoff," Hawley said in his opening remarks. Coming from a hearing room where Republicans and Democrats had spent much of the summer agreeing on nothing, the unanimity was the story: nobody on the dais defended it.

Here's the mechanism, because the mechanism is the whole argument.

Robert Hedges, the former chief data officer at Visa, testified about exactly what gets harvested. Location data. ZIP codes. Your internet address. What you've bought before. How long you lingered on a page before clicking. That collection feeds an estimate of your "willingness to pay" — and Hedges was careful to say the practice is not always negative. Sometimes the number the model spits out is a discount.

Sometimes it isn't.

The Federal Trade Commission documented the pipeline in January 2025, in preliminary findings from a study of eight pricing intermediaries. Those middlemen worked with at least 250 clients selling everything from groceries to apparel. The FTC found firms could set individualized prices and discounts off granular data — a cosmetics company targeting promotions by skin type and skin tone, for instance — and offered one hypothetical that lands hard: a shopper profiled as a new parent might be shown the more expensive baby thermometers first.

The concrete case that made this a hearing rather than a white paper is Instacart. A joint investigation by Consumer Reports and Groundwork Collaborative found roughly three-quarters of products checked were offered at different prices to different customers, with per-item gaps running from 7 cents to $2.56 — as much as 23 percent on some items. Scaled to an average family's yearly ordering, the investigators put the swing at around $1,200. Instacart said in December it would end the program; the company has characterized the differences as negligible. New York Attorney General Letitia James followed in January with a letter demanding more detail on the company's price-setting experiments.

Now the Rhode Island part.

Rep. Alex Marszalkowski, the Cumberland Democrat, introduced H7849 in March, the Surveillance Pricing and Online Retailing Act, which would bar "algorithmic price increases" — defined in the bill as charging a consumer more than a baseline price based on an automated analysis of personal data. The House Corporations Committee recommended holding it for further study, the standard first stop for a bill that isn't moving yet. The ACLU of Rhode Island submitted testimony in support.

Three weeks later, Sen. Dawn Euer of Newport and Jamestown introduced S2428, which takes a different route to the same place: it would make surveillance and dynamic pricing a deceptive trade practice under Rhode Island law and prohibit automated algorithmic analysis that results in customers seeing different prices for the same product.

Neither passed. Other states have moved. Maryland Gov. Wes Moore signed the Protection From Predatory Pricing Act in April, the first state law in the country to ban surveillance pricing outright — limited to food retailers and third-party delivery services, enforced by the attorney general, with civil penalties up to $10,000 per violation and $25,000 for repeat offenders. It takes effect October 1. Connecticut's ban, signed in May as part of a broader privacy overhaul, takes effect the same day. More than 40 bills across at least two dozen states were pending as of this spring.

Congress, meanwhile, has produced no surveillance pricing law at all. Rep. Greg Casar's Stop AI Price Gouging and Wage Fixing Act was referred to three House committees and went nowhere.

Which brings the menu back around. You can compare prices in a browser without cookies, clear your history, check a competitor. That helps at the margin. But the $1,200 figure in that Instacart investigation wasn't a consumer behavior problem — it was a pricing system, running quietly, and it stopped because two organizations tested it and published what they found. Rhode Island's version of a fix is sitting in committee.