Although Delta’s AI pricing could increase competition in the airline industry, Slover expects that companies using such pricing schemes are “all too likely” to be incentivized “to skew in the direction of higher prices” because of the AI pricing’s lack of transparency.
“Informed consumer choice is the engine that drives competition; because consumers won’t be as informed, and thus will have little or no agency in the supposed competitive benefits, they are more apt to be taken advantage of than to benefit,” Slover said.
Delta could face backlash as it rolls out individualized pricing over the next few years, Slover suggested, as some customers are “apt to react viscerally” to what privacy advocates term “surveillance pricing.”
The company could also get pushback from officials, with the Federal Trade Commission already studying how individualized pricing like Delta’s pilot could potentially violate the FTC Act or harm consumers. That could result in new rulemaking, Solver said, or possibly even legislation “to prohibit or rein it in.”
Some lawmakers are already scrutinizing pricing algorithms, Slover noted, with pricing practices of giants like Walmart and Amazon targeted in recent hearings held by the Senate Committee on Banking, Housing, and Urban Affairs.
For anyone wondering how to prevent personalized pricing that could make flights suddenly more expensive, Slover recommended using a virtual private network (VPN) when shopping as a short-term solution.
Long-term, stronger privacy laws could gut such AI tools of the data needed to increase or lower prices, Slover said. Third-party intermediaries could also be used, he suggested, “restoring anonymity” to the shopping process by relying on third-party technology acting as a “purchasing agent.” Ideally, those third parties would not be collecting data themselves, Slover said, recommending that nonprofits like Consumer Reports could be good candidates to offer that form of consumer protection.
At least one lawmaker, Sen. Ruben Gallego (D-Ariz.), has explicitly vowed to block Delta’s AI plan.
“Delta’s CEO just got caught bragging about using AI to find your pain point—meaning they’ll squeeze you for every penny,” Gallego wrote on X. “This isn’t fair pricing or competitive pricing. It’s predatory pricing. I won’t let them get away with this.”
