The world just got a lot creepier, and just as significantly, it raises questions about home sales.
Zillow, Redfin Hit with Video Privacy Lawsuits Over Website User Tracking
Zillow Group and Redfin Corporation each face a proposed class action lawsuit over their alleged use of secret pixels on their respective websites to track users’ video viewing habits and send that data to third-party vendors without valid consent.
Has Zillow and Redin been buying similar data and leveraging the data in negotiations when buyers make offers? If so, the number of lawsuits and subsequent meddling by regulatory agencies (DOJ) would wreck the RE industry.
FTC Investigates Online’ Surveillance Pricing’
By Jon Healey
Some Californian consumers may be paying higher prices than their neighbors pay.
Tech firms and consultants have been offering companies the ability to set “personalized” prices online based on customers’ ability or willingness to pay. using algorithms and artificial intelligence to sift through mountains of data to help maximize sales and profits.
Advocates say the technology takes the principle of efficient pricing to its logical extreme; critics say it’s unfair, discriminatory, and a perversion of free-market capitalism.
Last week, the FTC investigated how widespread this kind of “surveillance pricing” has become and its effects.
The five commissioners voted unanimously to order eight financial, tech, and consulting companies to reveal what pricing services they offer, what data they collect to power these services, who are using their services, and what effect that’s having on consumer prices.
FTC Chief Technology Officer Stephanie Nguyen said in an interview that the agency knows companies “are collecting massive amounts of data about consumers,” including very detailed, sensitive data about their demographics, where they go, what they look for, and what they buy.
The agency also knows that companies can use these data to specifically target information to individuals or groups. One group could be newborn mothers looking for baby formula, diapers, or medicines.
She said the agency’s new inquiry aims to determine whether, how, and how often such data are being deployed to set prices.
Privacy advocates welcomed the investigation.
Rather than setting prices based on supply and demand, surveillance pricing looks at indicators of your ability and willingness to pay, such as your credit card and bank balances,” said Lee Hepner, senior legal counsel for the American Economic Liberties Project.
“We’ve heard allegations that some companies are now able to charge you a different price based on how close you are to your next payday or if you just got paid,” he said.
Round Up the Usual Suspects
The eight companies ordered to submit information to the FTC are financial industry titans Mastercard and JPMorgan Chase, consultancies Accenture and McKinsey & Co., and tech companies Revionics, Bloomreach, Task Software, and PROS.
One threat posed by surveillance pricing is that it incentivizes companies to collect even more customer data because the info might be useful in these pricing systems, said RJ Cross, the director of the consumer privacy program at the US Public Interest Research Group
Instead of sellers offering goods and services to anonymous buyers, he said, “The seller knows everything about the buyer, and what they are likely, willing, and able to pay”—while keeping the buyer in the dark about what the seller is charging everyone else.
“It inverts, or you might say perverts, the assumptions at the very foundation of the justification for the free market,” he said.
Observers say using AI to power surveillance pricing systems could hinder the FTC’s inquiry because the systems’ inner workings may be complex to unpack and understand.
“It makes the job a lot harder if the people making the AI systems can’t even clearly articulate why a system is making a decision,” Cross said. “That puts regulators at a disadvantage.
However, the FTC may be able to rein in surveillance pricing if the agency determines that it violates the federal law against unfair and deceptive practices.
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