The Hidden Algorithm Deciding What You Pay

What if companies could figure out the exact maximum you’re willing to pay, and charge you exactly that?

That’s the promise of surveillance pricing: using your personal data, purchase history, location, online behavior, and even financial information to tailor prices specifically to you.

In this episode, Cara Stern talks with Vass Bednar, managing director of the Canadian Shield Institute and author of The Big Fix, about why this issue is suddenly on the political agenda in Canada, and what it means for consumers.

They discuss:
What surveillance pricing is, and how it differs from ordinary dynamic pricing
How companies use your data to predict your “willingness to pay”
Why two people could see different prices for the exact same product
The real-world examples already happening with apps, airlines, and delivery platforms

Why 83% of Canadians say this practice should be banned or regulated
What governments can actually do to stop it

Chapters:


Research/links:

Everything Costs More Because the Algorithm Says So | The Walrus
https://thewalrus.ca/everything-costs-more-because-the-algorithm-says-so/
How Corporate Consolidation is Ruining Everything: Discussion with Denise Hearn and Vass Bednar
https://youtu.be/Uz5DkpZPH2k?si=M_c-2GX4dS7wKF9l

Canadians Are Skeptical of Algorithmic Pricing - Abacus Data
https://abacusdata.ca/canadians-are-deeply-skeptical-of-algorithmic-pricing-and-want-governments-to-intervene/

AI-Driven Pricing May Be the Next Shock to Canadian Grocery Shoppers
https://retail-insider.com/retail-insider/2025/12/ai-driven-pricing-may-be-the-next-shock-to-canadian-grocery-shoppers/

Algorithms are raising prices for everything. This must stop - The Globe and Mail
https://www.theglobeandmail.com/business/commentary/article-algorithms-are-raising-prices-for-everything-this-must-stop/

Avi Lewis is smart to shed light on surveillance pricing | Canada's National Observer: Climate News
https://www.nationalobserver.com/2026/04/24/news/avi-lewis-ndp-surveillance-pricing

Algorithmic pricing: Poll finds half of Canadians against
https://www.cp24.com/news/canada/2026/03/18/most-canadians-want-to-ban-or-regulate-algorithmic-pricing-poll-shows/?lid=8z3lanxo654a

Hosted by Mike Moffatt & Cara Stern & Sabrina Maddeaux

Produced by Meredith Martin

Funded by the Neptis Foundation https://neptis.org/

Transcript

SPEAKER_01 0:00

There's evidence in the U.S. that a platform for nurses to take overtime fees had gone out and purchased credit and debt load data that they were layering in, essentially proxying a desperation score. So nurses that had more student debt were offered a cheaper price for their labor.

SPEAKER_00 0:17

Demographics, hosted by Mike Moffitt and Kara Stern. The next big hit to your wallet might not be inflation. It might be that stores can figure out the maximum you're willing to pay and charge you exactly that price. It's called surveillance pricing, and politicians are starting to debate whether Canada needs to ban it. Today I'm talking to Vass Bednar, a managing director of the Canadian Shield Institute and author of the book, The Big Fix. She's someone who's been writing about the problems with surveillance pricing since before almost any of us knew to worry about it. And we're so glad to have her back on the program. Thanks for having me. There's algorithmic pricing, there's dynamic pricing, and there's surveillance pricing. Like, what is surveillance pricing that we're talking about now?

SPEAKER_01 0:58

Surveillance pricing is sort of layers in with that computational data-driven pricing strategy. So beyond using a variety of factors like what your competitors are pricing something at, right? Um, personalized algorithmic pricing requires excessive data use about who you are, where you live, your behaviors online, sometimes your past purchase history, and sometimes where you are and where you're going. So it's a much more invasive pricing tactic that's supercharged by data and much more common in kind of an e-commerce context where there's way more information asymmetry. It's kind of just you and a screen, whether it's your phone and a loyalty program or, you know, shopping online. I would say that's that's the bigger difference.

SPEAKER_00 1:47

Like the first time I remember hearing about this type of pricing, and it's only sort of similar was with Uber, where you'd have like, you know, I remember people talking about if you're on an iPhone versus an Android, you'd get different prices. Like that's like a the bare minimum version of this kind of. But then also people started getting used to dynamic pricing with Uber. Like what's different with this?

SPEAKER_01 2:05

So dynamic pricing suggests supply and demand constraints, right? I think uh a parallel would be airlines, where we became pretty comfortable with price fluctuations that we could monitor, but weren't necessarily tied to the individual. So if you were getting a last-minute flight, uh it was maybe more expensive, you're booking far further in advance, there were more seats available, right? Now, because of data-driven pricing, there's some evidence that suggests about a thousand different data points are used to calibrate the price of your seat on an airplane. And back to the Uber example, you know, also some evidence that if you're uh using a business credit card, Uber will upcharge you, charge you more. Again, inferring your willingness to pay and squeezing more there. Where I think there's a difference between the kind of supply and demand type of calibrations, or I'll use the euphemism pricing experiments that we've seen with Uber, is external factors like say it's raining, so there's more demand, and they'll tell you, you know, prices higher right now, or um, Blue J just won the World Series, fingers crossed, you know, there's more people looking for rides out there, something like that, versus this ride is going to cost you more vast because you tend to take this route and we know you're very likely to take this route and you're using a business card.

SPEAKER_00 3:28

You already get some places like different apps that'll give you discounts based on things you've purchased before. So yeah, I know I get sometimes with like shoppers or Canadian Tire or like Tim Hortons will be like, hey, you have it, I mean we know you like to buy this kind of sandwich and you haven't bought it in a long time.

SPEAKER_01 3:43

What's your favorite thing at Tim Hortons?

SPEAKER_00 3:45

Well, it sometimes it gives me breakfast sandwiches discounts because I like their breakfast sandwiches and they're like good in a pinch, you know? So I'm like, sometimes it'll be a little bit of time since I've bought a breakfast sandwich because they tend to be like, you know, I'm going out on a route, have to go drive somewhere far or something. Like that's when I get it so it doesn't happen all the time. And then I'll get a notification like, hey, you haven't bought a breakfast sandwich in a while. Would you like a discount on that? If you buy it today, you'll get this discount. And to me, I'm like, that feels like a form of surveillance pricing that already exists, right?

SPEAKER_01 4:12

It's a form of it, but I would say the more insidious is something like uh the Taco Bell app being able to infer when it's your payday and increasing the price of your Cordita deal versus, you know, incentivizing you to come back to Tim Hortons. You know, Tim Hortons is actually a great example because they were investigated by the Federal Privacy Commissioner and many provincial privacy commissioners for their invasive data collection in their loyalty program, right? Tracking you down to where you are. Um, an Epic study from last year found that Target would make uh televisions in their store uh more expensive the closer you were to the store. So that's kind of inferring a probability that maybe you're going to make a purchase. Again, it makes it harder for people to understand what things actually cost. We're losing price universality as Canada considers whether and when we're going to tolerate this. Because you're right, there may be some instances where we think it's appropriate, say for discounting. We need to decide if we're looking at it from a privacy perspective, consumer protections perspective, marketing, you know, deceptive marketing angle. There are different ways to kind of get at it. But to your point that it's increasingly becoming a feature of how we experience markets, like absolutely. Um, even geographic pricing, which is more blunt, but like I used to think that my secret deodorant costs the same at every single shop or struck mark, right? And that's just not the case. And that's okay. And a funny phrase that I I don't know if I'll ever say again in my life, but there was like a good Toronto Sunpiece from a few months ago looking at Big Macs costing different amounts at different McDonald's. So it's not that the pricing differential itself is egregious. It just reminds us that that pricing strategy defies what we may have as an expectation of what the norm is with pricing when actually something very different is happening.

SPEAKER_00 6:07

So I get that the idea is that like they're using your personal information, and that's kind of like it seems like people think that's a little bit like icky when you people are talking about this. I see like Abacus Data did some research into how people felt about it and they found 83% of Canadians wanted it banned or regulated. They found only 7% of people are convinced by the argument that this is just supply and demand at work. So I'm trying to understand like, what is it about it specifically? Is it just that they're using your data in a way that like that is it that they're using more data than they did before? Because we've had for a long time things like seniors discounts. We've had coupons offered to customers who've purchased before, as I said. We have like, there's lots of different ways that the companies have targeted people using their data for so long. And usually it's been, I think, you know, you use your loyalty card or their app. And so they're collecting the data they get from your app, from the app that they created that you're choosing to use. So what is different about it now?

SPEAKER_01 6:57

What's different is that the discounts, let's let's stay with discounts because you know, a senior's discount is a good example, right? Is more blunt and uniformly experienced. So, you know, if you're over a certain age, and I believe, you know, for shoppers, it has to be a certain day as well, you have equitable access to that discount. That discount is not predicated on you having a mobile device, using a mobile device when you shop, you know, sharing additional information. Couponing is a very, I'll use the the D word, dumb, right? Dumb in the sense that it's not supercharged by data. You know, you and I can still access the same deals when they come in a flyer. Where we can't see each other's universes, Cara, is in these closed app ecosystems that are more finely calibrated to who we are. Are they necessarily discriminating against us, you know, as individuals? That's where it gets tricky with privacy law. Privacy law is designed for harms that individuals experience. But more often than not, personalized pricing is about segmenting, right? Creating particular cohorts, particular profiles. And that needs to be part of our conversation. How comfortable are we with people's information beyond past purchase history and that relationship that you have with the store? Another history, again, I think our conversation in Canada on personalized pricing, though, you know, I was trying to like beat a drum or tap my bongos on this, like feels like it very sudden, like feels like it almost came out of nowhere. There's been a lot of like learning and kind of overviews. And, you know, what do you mean this is happening? Also comes out of like the credit industry. So in the early 2000s, when Canadian Tire was continuing to develop their loyalty program, which is now called Triangle Rewards, they also had, you know, a credit offering. And what they learned from, again, this is more like big data seductive era, where we, I think, questioned less what we were doing with information and were just like amazed by what data science could do. Canadian Tire found things like anyone that had ever purchased something with a skull on it in the past was like not as reliable to give credit to. And the people that were most reliable, anyone that had ever purchased the little like felt circles that you put under furniture, you know, give them leeway with credit because they're seen as being responsible. So in that way, that's sort of interesting because your data can privilege you. The personalization of pricing that I think has gotten a bit out of control as a function of our weak privacy law tends to rely on much more.

SPEAKER_00 9:44

What can even be done to stop this? Because the hard part I'm getting at with this is that like it seems like there's like, where's the line? Sometimes you're like, oh, this is okay. Seniors, fine. That senior getting a discount over that senior because we know that they don't buy it, they haven't bought it in a while. Fine. Knowing that they have this much in their bank account, uh, don't like that. How do we actually draw the line when you're making policy?

SPEAKER_01 10:06

Okay, I've got a total grab back on this. You've like asked me a special question. I love being asked about policy solutions, but I just also wanted to offer that algorithmic pricing also happens in labor markets, where we have gig platforms that are monopsinistic. There's evidence in the US that a platform for nurses to take overtime fees had gone out and purchased credit and debt load data that they were layering in, essentially proxying a desperation score. So nurses that had more student debt were offered a cheaper price for their labor based on this calculation that said they are more desperate for the work and they need it more. So we're not going to pay them as much. I think that's important in terms of like pricing for labor and also that coming for white-collar work. Whereas nursing is something that I think we see is, you know, quite standardized and fairly predictable with work. So there are other ways that data-driven pricing is hurting people and maybe not aligned with our values. What can we do? I think the provincial approach framing as a consumer protection problem, which is what the province of Manitoba is doing, is pretty savvy. Federally, if we wanted to, we could, you know, this majority government could snap their fingers and make an amendment to our federal privacy law epipata and say that profiling, discriminating uh based on personal characteristics is just a harmful practice. And we can sort of just shut it down that way. The competition bureau, if there were a case that came forward, does have some ways they could think about this. One way that I think is novel is potentially double ticketing, right? Where you're supposed to, if if there's a different two different prices, supposed to give the shorter one. Is it a form of deceptive marketing? Again, a net new piece of legislation that just says this isn't allowed doesn't get us that far because we have to agree on what kind of practice we are pushing back against, right? Without hurting those abilities to, you know, get a legitimate discount. And loyalty programs are super interesting because that bargain is more explicit in terms of I'm going to give up some privacy in exchange for points. But even that bargain, I do think, is starting to fall down as people realize that many loyalty programs are ingesting more about them than they realize. My biggest hope for Canada is that we kind of keep the conversation uh going and don't just get locked in this more blunt, like, yes, no, I support it. Or there are some instances where we're comfortable with it and we tolerate it. Therefore, it is, you know, inherently good and helpful. This is not a pay what you can kind of, we're gonna calibrate it to what's possible for you. It's fundamentally something that is extractive. And the fact that it's increasingly part of people's everyday lives and purchasing everyday essentials, I think is like particularly egregious and concerning for thinking about Canada's middle class.

SPEAKER_00 13:16

When it comes to like how extractive it is, like I understand that's the goal of it is let's take as much money as we can from that person. There is a flip side of it where like when I heard about this, I was like, I'm a pretty frugal person. Okay, so you know, like sometimes I'll wait on something, I'll set alerts for when something goes down on Amazon and like it'll tell me, okay, it's dropping to the price you want to pay, buy it now. So then I was thinking, oh, well, in this case, like, would it end up that it would know that, like, oh, Kara doesn't like pay this much for this? We're gonna have to give her a lower price. Um, and someone who doesn't mind as much and has maybe has more money can pay more, they'll end up paying more. Like, is that possible that it'll turn turn out that way?

SPEAKER_01 13:54

I'm never a fan of everyday people kind of trying to fight back on these structural failures themselves. Uh, but I do recognize there are plugins from Amazon. I've tried one. I don't know, but Kara, I'm also in a phase of my life where I'm willing to splurge now and then for convenience. So I have used Instacart in the past when I'm like desperado, need some diapers, need a few groceries to get me over the line, my husband's traveling, I'm tired, whatever. I'm fine paying for a premium. I'm fine paying, I'm fine, definitely tipping someone uh very well. And I'm fine paying weird fees that Instacart uh thinks are necessary. Let's put that aside. What I'm not fine with is being put into one of what appears to be uh from research in the US, one of four pricing cohorts and seeing a different price, first of all, a different price than is advertised in store and a different price than other people for milk, eggs, and food based on maybe where I live, what I've purchased in the past, you know, what other people in my neighborhood tend to earn, areas of the city I spend a lot of time in, um, other websites that I go to. That's where I think it's a little bit out of hand. It's unnecessary. I'm also totally fine with companies having pricing power. No one is saying that that should be taken away from them. They've always had that. Or with companies using data to set prices. Um, data based on what their competitors are doing is great for a competitive market. Maintaining a high degree of information asymmetry with individuals, hiding from them that you're even testing out different prices with them. If companies need to do this so badly, and that's what we're going to be hearing from more in Canada, because this is what the opposition is starting to organize with in the US. And I'm being very surveillant on that. It's not hard. I just go around the internet, then they should be going out of their way to brag about when and how they're doing this to us because they're hiding it in privacy policies and they're not, right? And I think there is a sense of appropriate shame. But also there's there is a novelty factor where it's been really interesting to sort of design these apps and test out these prices and earn more money and learn more at the margins. That's where we're at.

SPEAKER_00 16:20

How would that look like? Like transparency on it. Would they be saying, you know, your price has been adjusted based on this sort of thing? Or like I don't know how it would actually play out.

SPEAKER_01 16:30

That's one way. A couple of places in the US have this where they just have this baseline of disclosure. So Uber does show, you know, this the price for this ride was set by an algorithm using your data. Uh, the Washington Post also has this notification now, right? So again, special offers, um, trying to test like what will bring you in, it's it's calibrated in a particular way. PlayStation was recently, I'll use the word caught, caught running a pricing experiment where, you know, they were advertising different prices for different games. It's an interesting question, right? For like an economics 101 class. Should we charge people who play video games more often, enthusiasts, more money because they're likely to pay more because they play more and they value it more? Maybe from like an extractive, let's optimize prices situation. But in terms of a what's appropriate in the marketplace and how, you know, how do people budget? How do you equitably access these goods that is, it's the exact same thing, I think it becomes harder to rationalize charging someone more. And what fascinates me about all this is in this cost of living crisis, opposing personalized algorithmic pricing demands a kind of cross-class solidarity that we probably haven't seen in a while or kind of ever, because we sort of have to unite against companies extracting value from all of us by kind of stepping over the line. The question is, where is that line? How are we going to set it together?

SPEAKER_00 18:07

Yeah, I guess the algorithm that they use right now, like PlayStation will say, if you're someone who wants on day one, you're spending this amount. If you want to play it close to release day, that's that's the cost of it. And right now they'll do like, you know, if you're willing to wait a year, wait even six months, a year, two years, it'll get cheaper over time. And so, and like that's an algorithm that they're using. So I guess we've we're okay with that sort of thing. Like, you know what, price goes down over time as more people get to play the game, fine. But the difference being that, well, day one price is different for someone who like plays a lot versus someone who doesn't. Yeah.

SPEAKER_01 18:39

I mean, look, gas prices, we observe gas prices changing, but you and I can see that or we can track that through the gas buddy app. When we go, you and I are both at the gas station, we're paying the same amount for that. Okay. You and I are both speaking in Ontario. Hydro prices, they fluctuate based on time of day. You and I experience that universally. If we can wait to do our laundry at night. So I know I feel like I'm doing laundry all the time and it never ends, and that we could do a whole episode on that. Again, that price, there's some price dynamism there, but we all experience it equally and we can all predict it. That's not what people are opposing with the kind of personalized pricing calibrations. It's that loss of price anchor. It is, you know, eroding, kind of taking away all the consumer surplus and also creating really intense information asymmetry. You can't discipline a market that you don't know. So I do agree with Premier Ford, who a few weeks ago now said he wants the market to be free. But he said he he wouldn't oppose personalized algorithmic pricing.

SPEAKER_00 19:47

He thinks this is part of a free market.

SPEAKER_01 19:49

He thinks it's part of a free market. And I would say that's an area where we differ, where to my mind, to have a market be more free and fair, we need to have those principles of transparency. We need better privacy laws. You can't discipline a market that you don't know.

SPEAKER_00 20:03

He said that the federal government can use the Competition Bureau. Provinces have been talking about this. As you said, Manitoba is, I think they were the first one in Canada to say something publicly that I am aware of. But premiers are talking like, what can be done at the different levels? Is there is there one level that really needs to take ownership? Is that federal? Or are there things the provincial government or municipal governments can do?

SPEAKER_01 20:23

Provincial governments could do something with the like residential and tenancy acts if they wanted to sort of say we don't want commercial landlords to use pricing algorithms or we want them to disclose, et cetera. That is like one potential tool. I used to think that Manitoba was the only province thinking about it, but I'll correct myself, fact check on myself, and say that the province of Quebec had updated their privacy law fairly recently. Their provincial privacy policy basically prohibits you from discriminating against someone based on their personal characteristics. That is a way to say you cannot personalize pricing. But to my knowledge, that law has not been tested. So a case has not come forward. We could better resource these institutions. Maybe a private action case could come forward. And though I love competition law and competition policy, the competition bureau is not my first pick because it's more of a watchdog policing function of the marketplace. Whereas privacy law and consumer protection feels more like an upstream market-shaping carving conversation. Of course, downstream, that might be an interesting lever to get at this. I'd love to see a private action case come forward to the Competition Bureau testing this. I think that would be really interesting. Haven't seen this yet. I'm not directly planning one, but like on my mood board and like Vass as side schemes, yeah, that would be cool. Frances Lankin, before she became a senator, one of the incredible things she was doing was running the United Way. And she Had a hot dog stand, maybe a food truck for the day. She set it up in front of Queen's Park and she was protesting the gender wage gap and gender, pink tax, also a place we tolerate differential pricing in ways that are weird. Okay. She sold hot dogs to boys for a dollar and hot dogs to girls for 75 cents. I thought that was great. You know, I'd love to have a food truck for a day. This is about it's like you didn't ask me what all my fantasies are, but I'm unleashing them on you. I just want to look at someone be like, oh, you wear glasses, your hot dog's a dollar fifty. Oh, you've bought a hot dog before, your hot dog's two dollars. And people would be upset and annoyed, and it would seem random and discriminatory because it is random and discriminatory. And I would also calibrate the prices in like fairly fine ways. So it's like, again, it's not necessarily not the monetary value, it's the principle that I think we need to be reacting to. Sure, if you're old, I could charge you a little bit less. Like again, I'm interested in confronting people with what it feels like to be seen by a commercial actor in a way that is invasive. So sorry I took you on that side quest, but you and I both have young kids.

SPEAKER_00 23:28

And I the place where I was willing to spend the most money is when you're like, you're up at 4 a.m. in the first like few months, and you're they're like, you're like, I don't know what to do. You're Googling something and you're like, I'll buy anything that'll get them to go to sleep, right? Yeah. You can send up so many ridiculous things, and I could just think, oh my God, if they have surveillance pricing allowed and they know that you have a young baby at home, like you are screwed. All of your life savings are going into like, I don't know, yoga balls that you can bounce on or whatever else that they say will help with it. It's horrible. Hopefully, we see some politicians pay attention to this and listen to you on how they can fix it. Because it would really be nice to see some protection. Like we need more competition, but in as you said, a fair way would be nice. If it was transparent, that'd be lovely.

SPEAKER_01 24:08

Yeah. More competition, but you know, what kind and how? Hopefully, we can be as detailed and kind of attentive as the software programs and proprietary algorithms are when it comes to us uh as we approach this policy problem.

SPEAKER_00 24:26

Thanks so much for joining us. Really appreciate having you on.

SPEAKER_01 24:29

I'm a huge fan of the show. I'm a huge fan of the show. Long time, long time listener, second time caller.

SPEAKER_00 24:35

Third time, I think. No? Third time caller? Yeah, because you were the you were on our pilot. You were here for talking about your book, The Big Fix. I think recommend people go and watch that one. That was really good. I love that book. It's like one of those books where I was reading it and I was like, yes, I'm so angry. I can't believe this is all happening and no one cares about this. Or some people care, but not enough people care about this. Get a it's a great book. And it's it's like the perfect length. You're like, I get into it, and I here's a solution. And I loved it.

SPEAKER_01 25:01

Snack size. Exactly. Let's go. Let's make Canada better.

SPEAKER_00 25:04

Thanks so much for watching and listening. Our producer is Meredith Martin, and our editor is Sean Foreman. If you have any questions about what calms a crying baby at 4 a.m., you can send an email to missing middle podcast at gmail.com. And we'll see you next time.