Credit: (NJ Spotlight News)
WASHINGTON — When Frank Pallone kickstarted a congressional inquiry into corporate America’s use of a strategy known as surveillance pricing, he said there would be more to come.
“This is just the beginning,” Pallone told reporters in May.
The New Jersey congressman made good on his word Wednesday, issuing letters to eight U.S. airlines demanding answers about how they gather personal data about customers, then use what they have learned to charge those customers different prices.
“We’re trying to find out just how widespread surveillance pricing is,” Pallone said Wednesday. “It’s a question of fairness, it’s a transparency issue, it’s a privacy issue, and they shouldn’t be doing this.”
In May, Pallone sent letters to 25 large U.S. corporations, including many groceries and big-box and online retailers, among them Albertsons, Amazon, Costco, Giant, Kroger, Target, Wegmans and Whole Foods. Pallone said his committee would issue more letters.
“It’s a pretty disgusting practice all around,” J.B. Branch, director of federal AI governance and technology policy at Public Citizen, a watchdog group, told NJ Spotlight News. “There’s a discrepancy in the power between big grocery stores or these large conglomerates and the average person who’s just trying to make ends meet.”
Where to report?
If they take the House of Representatives in November’s mid-term elections, congressional Democrats are expected to prioritize economic and health care legislation in January, as well as immigration reforms and oversight of the President Donald Trump’s administration and his family business empire.
Pallone, an influential Democrat whose committee has jurisdiction over an estimated 40% of topics before Congress, would almost certainly play a significant role crafting legislation in a Democratic-majority House.
On a Wednesday call with reporters, Pallone endorsed the broad idea of legislation on surveillance pricing in a new Congress, perhaps through a bill on data privacy. Such a bill could go a long way toward curtailing companies’ power to charge different prices, he said.
“If they don’t have the data, and we’ve minimized that, then you’re not going to have a lot of the problems with surveillance pricing,” Pallone said. “I don’t think it’s fair to charge people different prices based on their personal information.”
Industries gather information directly from consumers, perhaps through a rewards program, and third-party data from data brokers to create and implement these tailored pricing schemes.
“It’s really hard for regular people to know when it’s happening and when to report it,” Tom McBrien, counsel at the Electronic Privacy Information Center, an advocacy and research group based in Washington, D.C., told NJ Spotlight News. “It’s hard to know what other people are paying.”
Rewards programs
Without realizing it, customers often disclose information, such as their age or neighborhood, when they make a purchase.
Defenders of surveillance pricing point to corporate loyalty or rewards programs, which sweep up personal data and shopping habits, and allow return customers to earn coupons or other benefits for future purchases.
In January 2025, the Federal Trade Commission, an independent agency, released a report that found a handful of “intermediary” data companies “collectively work with at least 250 clients that sell goods or services to some combination of consumers and businesses.”
“Initial staff findings show that retailers frequently use people’s personal information to set targeted, tailored prices for goods and services—from a person’s location and demographics, down to their mouse movements on a webpage,” Lina Khan, the commission chair, said at the time.
An investigation by Consumer Reports, a watchdog group, released in December 2025 found that shoppers who use the grocery software program Instacart were charged different prices by as much as 23%.
Before the World Cup this summer, Pallone and Rep. Nellie Pou (D-9th) asked FIFA, the governing body of world soccer, to explains its “opaque” ticket pricing.
FIFA used dynamic pricing — the general practice of changing prices or rates based on demand distinct from surveillance pricing — to sell match tickets.
“Pricing has been unstable and opaque, allowing FIFA to continually adjust prices for the same inventory based on demand,” the New Jersey Democrats wrote FIFA president Gianni Infantino, a Trump ally.
The attorneys general of New Jersey and New York in May opened an investigation into FIFA’s ticketing practices.
Electronic shelf labels
Other terms for “surveillance pricing” include “personalized” or “algorithmic” pricing, said Ben Winters, director of AI and data privacy for the Consumer Federation of American, a nonpartisan advocacy group.
“This is happening economy-wide,” Winters said in an interview with NJ Spotlight News. “The U.S. is certainly open season” for the practice.
New Jersey is one of three states, along with Maryland and Connecticut, with state laws limiting surveillance pricing, experts said.
A few years ago, the issue was not broadly known, Winters said. This year alone, more than 40 bills have been introduced nationwide about the topic, he said. “In relatively recent times, the legislative energy has increased significantly.”
Gov. Mikie Sherrill, a Democrat, in July signed legislation to ban the practice for food and various household goods.
“If businesses want to compete, they should do so by offering better prices, not by finding new ways to squeeze shoppers,” Sherrill said. “This law puts New Jersey shoppers first by protecting their privacy and ensuring fairness in pricing.”
The law also imposes a moratorium on electronic shelf labels, known in the industry as ESLs — digital displays that change, allowing grocers to shift prices rapidly up or down.
“Electronic shelf labels are nothing more than a tool for corporations to hike prices and eliminate good jobs,” Ademola Oyefeso, a vice president of United Food and Commercial Workers International Union, said in a statement before Sherrill signedthe bill. “Any lawmaker who is serious about lowering the cost of groceries in their state needs to make banning ESLs and surveillance pricing in grocery stores a priority – Americans cannot afford to wait.”
Grocery stores try to find a sweet spot to charge customers more without their noticing, Branch said. “There are instances in which they will be able to move a price a dollar or two bucks. But if they do that too much across items, then people won’t shop at those stores.”
Pallone said the results of his inquiry will influence whatever legislation lawmakers write in the new Congress. “In order for me to build support for a legislative initiative, I have to be able to show to my members, both Democratic and Republican, that this is a major problem.”
