An AI model image
Concerns are spreading in South Korea that artificial intelligence (AI) may be analyzing consumers’ purchase histories and personal information to present different prices to different individuals.
According to the Wall Street Journal (WSJ), a consumer recently attempted to purchase a hard drive on the Walmart app and discovered that 369 dollars was displayed on their own smartphone, while a price 110 dollars lower was shown on their wife’s smartphone.
As cases like this—where the price of the same product varies depending on the consumer—become known, distrust is growing toward personalized pricing utilizing AI and algorithms.
Consumers worry that online shopping malls use cookies, search histories, and purchase records to present higher prices to customers with a high probability of making a purchase. In particular, as digital price tags and AI-based pricing technologies spread, anxiety is also mounting that the prices consumers see could change in real time.
However, major retailers including Walmart have stated that they do not use methods to raise prices individually by utilizing consumers’ income, purchase history, or sudden demand. Walmart simultaneously explained that the price difference in question was not due to customer-specific pricing.
As the controversy grows, some states are also showing moves toward regulation and information disclosure regarding algorithmic pricing. As AI is fully utilized in the pricing decisions of the retail industry, “who determines prices and based on what criteria” is expected to emerge as a new issue for consumer protection.
