The price of an item or service does not only vary based on supply and demand. Other factors come into play, including the model of phone or computer.
You don’t need to have studied economics to understand that prices vary depending on many factors. First of all, supply and demand of course, but also the season, the competition, and even the evolution of customer reviews. Many companies are practicing these “dynamic pricing” strategies, particularly thanks to increasingly efficient algorithms for analyzing navigation data in real time. But since the rise of artificial intelligence, this dynamic pricing technique has taken yet another turn. What most consumers don’t know is that this phenomenon can go much further: the prices of what you buy online can fluctuate depending on your phone.
One of the best-known examples is the case of the battery. A few years ago, Uber admitted that the app monitored charge percentage, and that users were more likely to pay more when their battery dropped below 10%. You are in an emergency, and the algorithm knows it. Although Uber denies using this data to set prices, several tests have revealed a difference (even small) in prices between a charged phone and a discharged phone. But even worse than your battery level, algorithms powered by artificial intelligence even recognize the model of your laptop and change prices accordingly.
The idea is simple: if you own an expensive device, like the latest iPhone for example, the AI infers that your purchasing power is high. And when you go to a merchant site, the algorithm would tend to offer you higher prices than on an older generation phone, or to suggest more luxurious products as a priority. But this phenomenon has actually existed for a long time. In 2012, the Wall Street Journal revealed that travel site Orbitz charged Mac users up to 30% more per hotel night than PC users because the algorithm suggested the most expensive accommodation options first.
Two years later, researchers from Northeastern University (United States) analyzed 16 commerce sites, proving that many of them practiced a form of “steering” prices based on the mobile device used (iOS or Android). And besides, smartphone users were offered more expensive products than desktop users. But since the arrival of artificial intelligence, algorithms are even more powerful, and some are capable of analyzing your behavior: for example, the faster you type on your keyboard, the more in a hurry you are, and therefore… the more you could spend to get what you are looking for.
Of course, not all sites or companies practice this personalized pricing strategy, but most are in any case able to do so. Moreover, it is completely legal, as long as this price discrimination does not affect religion, skin color, gender or any other discriminatory element in the eyes of the law. In short, the only real way to protect yourself from this would be to become completely unpredictable, so that the AI can no longer decipher your behavior. Or, take out your old laptop that’s gathering dust in a drawer, and use it for your next online purchases.
