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US House Committee wants travel companies to provide answers on AI pricing

The chairman of the U.S. House Oversight Committee asked the CEOs?of?five major companies, including Uber, Lyft, and?Expedia? on Thursday to disclose whether they used surveillance pricing of customers to increase costs.

In letters to companies, Republican Chair James Comer expressed concern that the use of highly personalized consumer data and the growth of surveillance pricing algorithms could create opportunities for companies to "weaponize personal data" and increase their profits at the expense providing transparency to consumers.

Surveillance Pricing is a pricing strategy that uses a consumer's data, such as their browsing history, location, and shopping habits, to set individualized algorithmic prices. This is an alternative to standard market pricing.

Comer stated in letters reported first by that travel firms use?surveillance prices' to deploy algorithms which determine a customer's emotional state and purchase intent, as well as their maximum willingness to pay. A tailored price is then determined based on this information.

Comer cited?a media report that Uber used AI-based pricing to offer different prices for identical products. Uber stated?on Thursday that it does not engage in surveillance pricing or personalize prices. Uber stated that "fares are determined based on factors such as location, time and demand. Not by individual characteristics, previous behavior or device information."

Booking.com, Instacart and the other companies who received letters did not respond immediately to comments.

In response to Comer's letter, documents must be submitted by March 19, including communications detailing revenue-management algorithms and their financial impact.

Comer wrote that "often this happens in a black?box environment" where consumers are unaware of the personalized pricing or which information is being collected about them.

Comer pointed out that companies use data from consumers to create "profiles" based upon individualized information such as "geolocations, demographics and browsing histories, purchase histories, device types, battery life...and even mouse clicks to assign different prices to individuals."

California Attorney General Rob Bonta launched a wide-ranging investigation in January into the use of personal data for setting individualized prices.

Delta Air Lines was asked by two dozen U.S. House Democratic Members in November to provide answers to questions about the use of artificial intelligence for setting ticket prices.

Lawmakers are concerned that airlines may use AI, consumer data, or internet usage to determine when people want to travel, then increase air fares and other prices. Delta said that "no fare product Delta ever used, tested or intends to use targets customers with personalized offers based upon personal information or other factors." Reporting by David Shepardson, Washington; editing by Chizu nomiyama and Matthew Lewis

(source: Reuters)