Senate examines the consumer cost of AI-driven surveillance pricing

A Senate hearing put personalized grocery pricing and electronic shelf labels on the federal policy agenda, but it did not establish that retailers nationwide are routinely charging different shoppers different prices.

The Senate Judiciary Subcommittee on Crime and Counterterrorism held the hearing, titled “Your Data, Their Profit: The Consumer Cost of AI Surveillance Pricing,” on Aug. 4, 2026, in Room 226 of the Dirksen Senate Office Building. Five witnesses testified: Hillary Caron of the United Food and Commercial Workers International Union, Robert B. Hedges Jr., a digital fellow at MIT and former Visa chief data officer, Lee Hepner of the American Economic Liberties Project, Lindsay Owens of Groundwork Collaborative and Z. John Zhang of the Wharton School at the University of Pennsylvania.

What lawmakers examined

The central distinction was between ordinary dynamic pricing and what witnesses called surveillance pricing. Dynamic pricing can adjust prices in response to broad market conditions, such as supply, demand, inventory, competitor prices or timing. Surveillance pricing uses information tied to an individual consumer or household to tailor a price, promotion or offer.

Hedges said the information used in surveillance-pricing systems can include location, browsing history, shopping history, loyalty-program activity, payment-card activity, device details, online-cart behavior and inferred characteristics such as purchase intent or willingness to pay.

Witnesses also questioned whether personalized discounts are genuine savings or a way to test how much a shopper may be willing to pay. Those warnings were presented as policy and consumer-protection concerns. They are not proof that every grocery retailer is using individualized prices in routine transactions.

Why electronic shelf labels matter

Electronic shelf labels allow stores to change posted prices remotely from a central system. That can make price updates faster and reduce the labor required to replace paper tags.

But the labels themselves do not prove that a store is charging each shopper a different price. They are a tool that can support centralized or frequent price changes; whether a retailer uses them for uniform price updates, promotions, inventory management or individualized pricing depends on the retailer’s systems and policies.

Caron, policy counsel for the United Food and Commercial Workers International Union, told the subcommittee that electronic shelf labels could affect grocery workers whose duties involve changing or managing shelf prices. She also urged lawmakers to examine loyalty programs, data collection and automation.

Independent reporting by The Associated Press described a study of five years of prices at one grocery chain. The researchers found virtually no increase in demand-based price surges after electronic shelf labels were adopted there. That evidence does not settle how every retailer uses the technology, but it reinforces the need to distinguish the capability of electronic labels from documented conduct.

What the FTC evidence shows — and does not show

The Federal Trade Commission’s Jan. 17, 2025 initial findings provide federal context for the hearing. The agency said pricing intermediaries may use precise location, demographics, browsing patterns, shopping history and other behavioral signals to tailor prices or promotions.

The FTC said its study was still ongoing. Its public materials were based on an initial analysis of documents obtained from companies including Mastercard, Accenture, PROS, Bloomreach, Revionics and McKinsey. Because information from the study was aggregated or anonymized, the agency said its public materials included hypothetical examples.

The FTC’s findings describe capabilities and potential practices involving intermediaries that work with retailers, including grocery businesses. They do not by themselves establish that grocery stores across the United States are broadly charging different individuals different prices for the same item, or that particular retailers violated the law.

What legislation could do

Witnesses pointed to the Stop Price Gouging in Grocery Stores Act, introduced in the Senate as S. 3892 and in the House as H.R. 4966. The proposals would address price gouging and surveillance-based price setting in retail food stores. The measures also include provisions involving disclosures, facial-recognition technology, electronic shelf labels and Federal Trade Commission enforcement.

S. 3892 was introduced by Sen. Ben Ray Luján and referred to the Senate Commerce, Science, and Transportation Committee on Feb. 12, 2026. H.R. 4966, introduced by Rep. Rashida Tlaib, was referred to the House Energy and Commerce and Judiciary committees on Aug. 12, 2025. Neither bill had become federal law as of Aug. 15, 2026.

Any nationwide restrictions or disclosure requirements would require further action by Congress or, where existing authority allows, federal agencies.

What shoppers should watch next

The practical questions are whether retailers disclose when personal data affects a price or discount, whether loyalty benefits are offered on equal terms, and whether prices shown online, in an app and on a store shelf are governed by the same rules.

The hearing created a public record of competing claims and possible policy responses. It did not create a new nationwide grocery-pricing rule. For consumers, the issue remains whether data-driven pricing will become more common — and whether lawmakers require clear notice before it does.

Sources

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