Large corporations are playing a game, and the customers are their pawns. Recently, companies have used “dynamic pricing” to maximize their profits, which increases the cost of necessities and compromises confidentiality.
Dynamic pricing is a strategy that bases products’ prices on market trends such as demand, competitor pricing, and inventory levels. Businesses and services use this strategy to assess market conditions and predict optimal pricing. It is also the reason why concert prices cost over $18,000 for a VIP seat, and Uber transportation costs triple during jam-packed periods.
Conflicts arise when dynamic pricing is introduced as an implementation that seems to legitimately benefit a business, when it actually masks malicious intent. Realpage, a property management software, mentioned on its company page that it was built on the premise of providing “conventional and affordable multifamily rental house markets.”
In early January of this year, RealPage was sued for allegedly carrying out scheming efforts that included using private information from competitors to primarily benefit its landowner users. Critics argue that this access helped clients charge the highest possible rent. A press release from the U.S. Department of Justice revealed that this plan impacted millions of renters in the United States.
Concerns resurface with the rise of the digital price labels in supermarkets. According to Walmart, which implemented dynamic pricing in 2024, these labels can be updated “within two minutes.”
Dynamic pricing, when applied to grocery stores, poses a problem to less fortunate communities. Approximately 44 million Americans have defective water systems, resulting in their water quality falling below the standard. Because these Americans rely on purchasing bottled water at supermarkets, algorithms may detect this high demand and subsequently increase prices for these products that provide sustenance to underprivileged communities.
Another matter of concern is the impending danger this collection of data presents. U.S. supermarket chain Kroger mentions in their privacy policy that it acquires a customer’s name, mailing address, phone number, purchase history, location data, financial information, health-related information and mobile device data during customers’ shopping experiences. They then sell this information to other brands, which, according to EPIC (Electronic Privacy Information Center), garnered Kroger “big money”.
This violates the Fourth Amendment, which protects against unreasonable search and seizure. People come into these stores to buy food, and are charged at the expense of their confidential information being exchanged between businesses.
Not to mention, Kroger’s subsidiaries include supermarket chains such as Ralphs and Food 4 Less, which have over 369 locations in California alone. With their privacy policy violating individual rights, other corporations may follow in Kroger’s footsteps and contribute to the normalization of this unjustifiable exercise.