surveillance pricing

Delta denies using AI to come up with inflated, personalized prices

AI, AI pricing, Artificial Intelligence, Delta, Policy, predatory pricing, surveillance pricing / Kelly Newman / August 2, 2025

Delta scandal highlights value of transparency

According to Delta, the company has “zero tolerance for discriminatory or predatory pricing” and only feeds its AI system aggregated data “to enhance our existing fare pricing processes.”

Rather than basing fare prices on customers’ personal information, Carter clarified that “all customers have access to the same fares and offers based on objective criteria provided by the customer such as origin and destination, advance purchase, length of stay, refundability, and travel experience selected.”

The AI use can result in higher or lower prices, but not personalized fares for different customers, Carter said. Instead, Delta plans to use AI pricing to “enhance market competitiveness and drive sales, benefiting both our customers and our business.”

Factors weighed by the AI system, Carter explained, include “customer demand for seats and purchasing data at an aggregated level, competitive offers and schedules, route performance, and cost of providing the service inclusive of jet fuel.” That could potentially mean a rival’s promotion or schedule change could trigger the AI system to lower prices to stay competitive, or it might increase prices based on rising fuel costs to help increase revenue or meet business goals.

“Given the tens of millions of fares and hundreds of thousands of routes for sale at any given time, the use of new technology like AI promises to streamline the process by which we analyze existing data and the speed and scale at which we can respond to changing market dynamics,” Carter wrote.

He explained the AI system helps Delta aggregate purchasing data for specific routes and flights, adapt to new market conditions, and factor in “thousands of variables simultaneously.” AI could also eventually be used to assist with crew scheduling, improve flight availability, or help reservation specialists answer complex questions or resolve disputes.

But “to reiterate, prices are not targeted to individual consumers,” Carter emphasized.

Delta further pointed out that the company does not require customers to log in to search for tickets, which means customers can search for flights without sharing any personal information.

For AI companies paying attention to the Delta backlash, there may be a lesson about the value of transparency in Delta’s scandal. Critics noted Delta was among the first to admit it was using AI to influence pricing, but the vague explanation on the earnings call stoked confusion over how, as Delta seemed to drag its feet amid calls by groups like Consumer Watchdog for more transparency.

Delta denies using AI to come up with inflated, personalized prices Read More »

Delta’s AI spying to “jack up” prices must be banned, lawmakers say

“There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized offers based on personal information or otherwise,” Delta said. “A variety of market forces drive the dynamic pricing model that’s been used in the global industry for decades, with new tech simply streamlining this process. Delta always complies with regulations around pricing and disclosures.”

Other companies “engaging in surveillance-based price setting” include giants like Amazon and Kroger, as well as a ride-sharing app that has been “charging a customer more when their phone battery is low.”

Public Citizen, a progressive consumer rights group that endorsed the bill, condemned the practice in the press release, urging Congress to pass the law and draw “a clear line in the sand: companies can offer discounts and fair wages—but not by spying on people.”

“Surveillance-based price gouging and wage setting are exploitative practices that deepen inequality and strip consumers and workers of dignity,” Public Citizen said.

AI pricing will cause “full-blown crisis”

In January, the Federal Trade Commission requested information from eight companies—including MasterCard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co—joining a “shadowy market” that provides AI pricing services. Those companies confirmed they’ve provided services to at least 250 companies “that sell goods or services ranging from grocery stores to apparel retailers,” lawmakers noted.

That inquiry led the FTC to conclude that “widespread adoption of this practice may fundamentally upend how consumers buy products and how companies compete.”

In the press release, the anti-monopoly watchdog, the American Economic Liberties Project, was counted among advocacy groups endorsing the Democrats’ bill. Their senior legal counsel, Lee Hepner, pointed out that “grocery prices have risen 26 percent since the pandemic-era explosion of online shopping,” and that’s “dovetailing with new technology designed to squeeze every last penny from consumers.”