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Highlights
- Federal and state governments are escalating scrutiny of "surveillance pricing" and artificial intelligence (AI)-enabled pricing practices.
- Regulators are increasingly focused on personalized pricing tied to consumer data, price experimentation, and how prices and fees are disclosed to consumers.
- For companies that utilize variable pricing, ticketing fees, loyalty programs and algorithmic revenue management, this government activity creates near-term compliance risk and controversy even absent attempts at statutory or regulatory limitations.
- State enforcement and legislative activity around surveillance pricing is accelerating and converging on consumer data use and transparency, with dozens of states considering legislation, underscoring a rapidly expanding and fragmented regulatory environment.
Federal and state governments are escalating scrutiny of "surveillance pricing" and artificial intelligence (AI)-enabled pricing practices, particularly where pricing relies on consumer data, opaque algorithms or insufficient price transparency. Although traditional dynamic pricing based on market conditions remains lawful, regulators are increasingly focused on personalized pricing tied to consumer data, price experimentation, and how prices and fees are disclosed to consumers.
Against this backdrop, continued and increasingly aggressive government scrutiny is expected – from the Federal Trade Commission (FTC) and U.S. Congress, as well as state attorneys general – of pricing practices that rely on consumer data, algorithmic decision‑making or opaque pricing mechanics, even where companies maintain that prices are driven by traditional market factors rather than individualized profiling.
This scrutiny is being driven primarily by:
- FTC enforcement, rulemaking and ongoing surveillance pricing studies
- congressional oversight, including an ongoing U.S. House of Representatives Committee on Oversight and Government Reform investigation into AI‑driven pricing across travel and platform industries
- emerging federal legislative activity focused on transparency and data use in pricing
- state attorneys general and legislatures using consumer protection, privacy and competition authorities to regulate or restrict surveillance pricing practices
For companies that utilize variable pricing, ticketing fees, loyalty programs and algorithmic revenue management, this government activity creates near‑term compliance risk and controversy, even absent attempts at statutory or regulator limitations.
What Regulators Mean by Surveillance Pricing
Federal regulators define "surveillance pricing" as pricing practices that use detailed consumer personal data – including location, browsing history, demographics or behavioral inferences – to set individualized prices or offers for the same product or service. The FTC has emphasized that advances in data collection and machine learning have made such pricing scalable and difficult for consumers to detect.
Critically, regulators distinguish dynamic pricing, which responds to market conditions (inventory, demand, seasonality), from personalized or surveillance pricing, which responds to characteristics of the individual consumer rather than the market as a whole. This distinction is increasingly central to enforcement, legislation and congressional oversight.
FTC: Active Enforcement and Ongoing Surveillance Pricing Work
Surveillance Pricing Study and Policy Focus
In 2024, the FTC launched a Section 6(b) study to examine how companies and intermediaries use consumer data to implement surveillance pricing and algorithmic decision‑making. The FTC continues to maintain public resources describing this work and its consumer protection rationale.
In testimony before Congress in April 2026, FTC leadership confirmed that staff work on surveillance pricing continues and that the agency is assessing whether additional disclosures may be required when pricing is highly personalized or driven by consumer data.
Enforcement Emphasis on Price Transparency in Ticketing
The FTC has paired its surveillance pricing focus with aggressive enforcement on price transparency, particularly in live event ticketing. The FTC recently announced a settlement with a ticket exchange to resolve allegations that it failed to clearly and conspicuously disclose mandatory fees as required under the FTC Act and the agency's rule governing unfair or deceptive fees. The FTC emphasized that total ticket prices must be disclosed upfront and prominently at all stages of the purchase process.
The implication is that pricing enforcement risk is no longer theoretical but an active priority grounded in FTC rule violations and Section 5 authority.
Expected Posture Going Forward
The FTC is expected to aggressively pursue surveillance pricing and related deceptive pricing theories. Even where companies deny using personal data to set prices, the FTC has signaled that opacity, inconsistent consumer explanations or pricing outcomes that exceed reasonable consumer expectations may independently trigger investigation.
In this environment, the FTC is likely to scrutinize not only how pricing systems operate, but also whether consumer‑facing descriptions are accurate, consistent and sufficiently transparent to reflect underlying pricing mechanics.
Congressional Oversight: AI‑Driven Pricing Under Investigation
House Oversight Committee Investigation
On March 5, 2026, the House Oversight Committee formally launched an investigation into the use of surveillance pricing.
The committee sent letters to major travel and platform companies requesting documentation regarding revenue management algorithms, use of consumer data in pricing, testing and experimentation practices, and internal communications describing pricing tools and outcomes.
The committee has characterized surveillance pricing as a "black box" process in which algorithms infer willingness to pay more and adjust prices accordingly without consumer awareness or meaningful transparency.
Scope and Direction of the Inquiry
The investigation reflects a broader shift toward scrutiny of unilateral, data-driven pricing practices, including:
- whether companies distinguish between market-based dynamic pricing and individualized pricing tied to consumer attributes
- how algorithmic pricing tools are tested, governed and monitored
- whether pricing varies based on location, device or behavioral signals
- how pricing practices are described to consumers
The inquiry also suggests potential scrutiny of third-party vendors and pricing tools, not just internal systems.
Why Congressional Scrutiny Matters
Even absent immediate legislation, congressional investigations create material risk, including compelled document production, public hearings, reputational exposure, and referrals to the FTC, U.S. Department of Justice or state attorneys general. Given bipartisan interest in the issue, this risk will persist regardless of outcomes in the congressional midterm elections.
In practice, congressional oversight often serves as an early forcing mechanism – requiring companies to explain and defend pricing practices well before formal enforcement begins. For travel, entertainment, housing, e-commerce and other companies, AI‑assisted pricing in consumer‑facing markets is now a priority oversight issue.
Federal Legislative Developments: Emerging Focus on Transparency and Data Use
Federal legislative activity is taking shape regarding the use of consumer data in pricing, with lawmakers signaling growing concern that personalized pricing may be unfair, discriminatory or insufficiently transparent.
Recent proposals in both chambers of Congress would restrict or prohibit the use of certain consumer data to determine prices in consumer-facing markets. These efforts reflect a broader shift toward treating data-driven pricing not only as a commercial practice, but also a consumer protection and fairness issue. Although these proposals remain early-stage and sector-specific, they point to several emerging themes:
- potential limits on the use of consumer data in pricing decisions
- disclosure expectations where pricing is influenced by individualized data or algorithms
- increased scrutiny of pricing systems that are not readily explainable to consumers
At the same time, lawmakers across committees have raised concerns about similar practices in travel and ticketing markets, particularly where pricing may vary based on consumer information or the basis for price differences is not transparent.
Taken together, these developments suggest that legislative risk is evolving alongside oversight activity. Even absent near-term enactment, companies should expect continued pressure toward greater transparency and clearer boundaries around the use of consumer data in pricing.
State Attorneys General and Legislatures: Faster-Moving Regulation
State enforcement and legislative activity around surveillance pricing is accelerating and converging on consumer data use and transparency.
California is pursuing surveillance pricing through a privacy-enforcement lens, and New York has enacted a law requiring disclosure when personalized algorithmic pricing is used. In addition, Maryland has passed the Protection from Predatory Pricing Act, restricting certain practices and treating violations as deceptive trade practices.
Dozens of additional states are considering similar legislation, underscoring a rapidly expanding and fragmented regulatory environment.
AI's Role in Heightening Enforcement Risk
The FTC has emphasized that machine learning and automated experimentation materially change the enforcement landscape by enabling granular consumer segmentation, rapid A/B price testing and optimization processes that are largely invisible to consumers.
Congress has echoed these concerns, characterizing AI pricing tools as amplifying the potential for unfair, deceptive or discriminatory outcomes where personalization is not transparent.
For companies, AI is now a risk multiplier when used in pricing, merchandising, bundling or fee presentation, particularly where experimentation occurs without consumer disclosure or governance controls.
Practical Compliance Takeaways for Companies
Government activity suggests companies should prioritize:
- Pricing Data Mapping. Identify whether consumer or device data influences base prices, fees, bundles, upgrades or "recommended" offers.
- Clear Separation of Pricing Models. Distinguish market‑based dynamic pricing from personalized pricing tied to consumer data.
- Fee and Price Transparency Audits. Ensure total prices and mandatory fees are clearly disclosed at all stages of the consumer journey, consistent with FTC expectations.
- AI and Experimentation Governance. Implement appropriate controls for algorithmic pricing tools and A/B testing, including oversight of how models are deployed and evaluated.
- Inquiry Readiness. Ensure pricing practices can be clearly and consistently explained to regulators and Congress, with alignment across legal, business and communications functions regarding data use, pricing logic and consumer disclosures.
Companies should approach these steps with an eye toward regulatory scrutiny and practical defensibility, particularly as FTC enforcement and congressional inquiries continue to evolve.
Holland & Knight's Consumer Protection Defense and Compliance and Congressional Investigations teams regularly advise clients on pricing practices, intelligence gathering on potential investigations, and risk mitigation in this area, as well as robust defense in the event of a congressional inquiry.
Conclusion
Surveillance pricing has emerged as a focal point for coordinated government scrutiny across the FTC, Congress and state regulators. Practices that rely on consumer data or opaque pricing mechanics are increasingly evaluated through a consumer protection and data governance lens, not just traditional pricing principles.
Companies using what government critics consider surveillance pricing should expect continued government scrutiny and ensure that their practices are transparent, defensible and capable of clear explanation to regulators and policymakers. Such efforts may not prevent scrutiny in the future but will be valuable in mitigating that risk and preparing defenses in the face of an inquiry. Working with experienced counsel will help you better understand how these risks apply to your specific practices and be better prepared should scrutiny arise.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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