Retailers Must Separate ESLs From Surveillance Pricing As Federal Pressure Mounts

Aug 11, 2026 11:30 PM - 1 hour ago 1

The Senate Judiciary Committee held a subcommittee gathering past week aimed astatine exposing what Chairman Josh Hawley described arsenic “exploitative practices of AI surveillance pricing.”

In his opening remarks, Hawley came retired swinging pinch characteristic fervor. “AI surveillance pricing is the unholy trinity of everything Americans hate: spying connected people, ripping them off, and taking distant jobs,” he said, adding, “AI weaponizes your information against you for profit.” To which ranking personnel Dick Durbin offered a quiet amen from crossed the aisle.

Among those who presented grounds astatine the proceeding was Lindsay Owens, Groundwork Collaborative and writer of the soon-to-be-released book, Gouged: The End of a Fair Price–and What That Means for Your Wallet; Robert Hedges, Former Chief Data Officer astatine Visa and Digital Fellow astatine MIT; and Hillary Caron of United Food and Commercial Workers International Union.

In his introduction, Hawley elaborate really Kroger earned complete $500 cardinal past twelvemonth trading loyalty customer information to different companies and that Delta Airlines is partnering pinch AI surveillance pricing patient Fetcher, which stated “that it’s clip for the airlines to participate an exploitation shape of AI technology.”

Hawley besides leveled disconnected against what he called integer support labels—more wide termed physics support labels successful the industry—as a nett destroyer of unit jobs because prices tin beryllium changed instantly pinch nary quality hands required to switch retired printed labels. He besides warned they could beryllium utilized arsenic a intends of surveillance pricing too.

Citing ways that airlines could perchance usage surveillance pricing algorithms to complaint customers different prices connected the aforesaid formation for seats adjacent to each other, Hawley cautioned, “It’s going to beryllium the market stores and everybody other until we fig retired really to bring transparency, really to bring honesty and immoderate protections for the American consumer.”

ESLs Buried Under Surveillance Pricing Headline

Throughout the hearing, different concepts—such arsenic algorithms, move pricing, surge pricing, AI-powered pricing—and applications were testified to nether the overarching statement astir surveillance pricing.

In the simplest terms, surveillance pricing was defined by Dr. Owens arsenic “what happens erstwhile corporations complaint different prices for the aforesaid point based connected your individual information.” She asserted this believe violates the foundational rule of American consumerism that “every customer would beryllium charged the aforesaid value for the aforesaid item.”

Going against the grain, University of Pennsylvania trading professor Z. John Zhang testified that the perchance prejudicial word “surveillance pricing” should beryllium replaced by the much neutral, moreover affirmative sounding word “personalize pricing.”

He moreover touted its benefits: “It is simply a captious competitory pricing instrumentality successful the modern property of information-intensive marketing. It tin use firms, consumers, aliases astatine minimum lower-income consumers, and nine erstwhile done properly.”

Besides ESLs being mentioned successful Hawley’s opening remarks and little references during different testimonies, only UFCW’s wide argumentation counsel Caron went into immoderate item astir the subject. Stating that the UFCW represents 1.2 cardinal workers crossed the nutrient manufacture proviso chain, including 800,000 market workers, she pointed to ESLs arsenic the intends retailers perpetuate predatory pricing.

“ESLs are the exertion that allows surveillance pricing, move pricing, surge pricing, and a full scope of predatory practices to migrate from apps and online into the brick-and-mortar stores,” she testified.

Caron correctly stated, “On their own, ESLs are simply a portion of hardware to show prices.” Yet, she added, “The problem is that they’re not utilized connected their own. They’re connected to stores’ inventory systems, constituent of waste systems, and pricing systems, which usage user information and AI to group prices successful a measurement that maximizes profit.”

Confusion Rather Than Clarity

There appears to beryllium statement among the subcommittee members concerning surveillance pricing, arsenic Senator Mike Blumenthal said, “You tin consciousness a bipartisan emotion of urgency astir this topic, peculiarly among members of this subcommittee.”

However, he besides acknowledged location is disorder astir the differences betwixt “dynamic pricing”—price changes affected by market-based changes, specified arsenic surge pricing communal successful hospitality, airlines and ride-sharing services that are mostly considered lawful—and “surveillance pricing,” based upon circumstantial characteristics and/or behaviors of the consumer. Regarding those distinctions, he remarked, “For the user who sees prices rising, they don’t care.”

Given the disorder among the committee members, it’s nary astonishment that consumers are equally—if not more—confused. According to a study among 1,000 American voters conducted by GBAO Strategies and sponsored by UFCW, an overwhelming 65% judge replacing insubstantial value tags pinch integer ones will make groceries much expensive, while 24% said prices will enactment the same.

But successful a follow-up mobility astir projected legislation, the study bundles the 2 very different issues together: banning surveillance pricing—using individual information to group prices for individual customers—and banning ESLs. The consequence is simply a distorted information point. Nearly 70% said they support bans against both, arsenic if surveillance pricing and ESLs are the aforesaid thing. They are not.

NRF Missing From The Hearing

The 1 statement pinch perchance the biggest stakes successful the result of the proceeding—the National Retail Federation—was conspicuous successful its absence, though it submitted a five-page written statement. Hopefully, the legislators will publication and digest it, since arsenic the NRF authoritatively states, unit is the nation’s largest private-sector employer and added, “No different manufacture aliases statement is person to the user than retail.”

The NRF brought clarity to the proceedings, stressing that, “It is highly misleading to comparison move pricing practices successful unit to different sectors for illustration thrust shares aliases airlines, industries pinch acold less competitors and vastly different business models.”

The NRF besides challenged the conception that data-driven aliases algorithmic pricing is utilized to summation profitability done value maximization. “Unlike industries pinch a mini number of competitors, astir each retailer seeks to maximize revenues by trading much products astatine little prices, alternatively than trading less items astatine higher prices.” It added, “Data-driven discounts are devices retailers usage to widen savings to much customers, much often.”

The NRF besides called connected the Senate to proceed to support invention successful the unit industry—composed of 600,000 retailers and employing 55 cardinal Americans crossed the extended unit ecosystem.

The NRF explained ESLs are a exertion invention that intelligibly and accurately show prices successful real-time. And much importantly, they are an ratio tool, freeing shop unit from manually swapping retired insubstantial labels truthful they tin get connected pinch much important, customer-facing tasks.

The NRF besides submitted that ESLs amended pricing accuracy successful bid to comply pinch existing national and authorities laws governing truth successful advertizing and pricing displays.

“Thirty years ago, retailers person to organize, print, cheque for accuracy and deploy stickers and insubstantial signs for hundreds of thousands of products successful a store,” it said. “Today, they tin usage inventory guidance package and physics support labels to quickly and accurately update prices pinch the click of a button.”

Remember Barcodes?

As legislators and regulators look disconnected against the perchance prejudicial believe of surveillance pricing, it’s basal to abstracted it from the technological invention of ESLs. ESLs don’t person video cameras aliases different sensors to stitchery user information aliases alteration prices connected the spot. Rather, they streamline unit operations and by extension, amended service the customer.

It’s worthy recalling backmost successful the 1970s and 1980s when Universal Product Codes began replacing insubstantial value tags. At the time, barcodes and the scanners that publication them promised to move checkout lines faster, amended inventory search and trim retailers’ operating costs.

Consumers were uncertain astir the exertion and user defense groups raised alarms, informing astir value transparency. The UFCW powerfully opposed the move, arguing it threatened unit cashier, stockroom and storage jobs. Congressional hearings were held and authorities projected to require beingness value tags connected products alongside scanning technology.

Yet, by the precocious 1980s, the barcode scanning exertion was wide adopted and pinch exposure, consumers came to spot the benefits of the system. As promised, the checkout statement did so move faster, and customers weighted the much elaborate printed receipts they received astatine the end. In effect, the exertion introduced greater pricing transparency, not less.

And nary of the threatened unit occupation losses materialized either. On the contrary, direct unit employment much than doubled by the extremity of the century, increasing from 7.4 cardinal successful 1970 to 15.4 million. Ironically, that employment number has mostly flatlined since past and presently stands astatine 15.4 cardinal arsenic of July.

Don’t Hold Back Retail Technology Advancement

The NRF concluded: “As the Subcommittee continues its introspection into pricing practices, we impulse the Senate not to stifle invention that sustains a viable unit assemblage and helps support prices arsenic debased arsenic possible.

“Moreover, we besides impulse policymakers to retrieve that the basal incentives successful a genuinely competitory marketplace for illustration unit align very intimately pinch the interests of our customers. Retailers are successful the business of building customer spot and loyalty and utilizing information to service customers better.”

It’s unfortunate that the NRF wasn’t capable to coming its lawsuit successful person. ESLs sewage swept up into the broader statement astir surveillance pricing erstwhile they should person been treated separately. Electronic support labels are simply a exertion innovation—one that improves unit operations and yet tin service the customers, conscionable arsenic barcodes did 50 years ago.

At this moment, the important point the NRF and different manufacture advocates tin do is make the favoritism clear: ESLs and surveillance pricing are not the aforesaid thing. Unless policymakers understand the difference, the consequence is that laws will beryllium written that dainty them arsenic if they were.