U.S. Sens. Mark Warner (D-VA), Ruben Gallego (D-AZ) and Richard Blumenthal (D-CT) are demanding Delta Air Line answer questions about its plan to use Artificial Intelligence to set surveillance-based ticket prices.
In a letter to Delta CEO Ed Bastian, the senators said using AI to set ticket prices based on how much a customer is willing to pay presents a number of concerns.
“Individualized pricing, or surveillance-based price setting, eliminates a fixed or static price in favor of prices that are tailored to an individual consumer’s willingness to pay,” the senators wrote. “Delta’s current and planned individualized pricing practices not only present data privacy concerns but will also likely mean fare price increases up to each individual consumer’s personal ‘pain point’ at a time when American families are already struggling with rising costs.”
According to Fetcherr CEO Roy Cohen, AI adoption and usage could use data to set pricing that would increase the aviation industry’s profits by up to $4.4 trillion annually.
“The implications for individual consumer privacy are severe on their own. Surveillance pricing has been shown to utilize extensive personal information obtained through a variety of third-party channels, including data about a passenger’s purchase history, web browsing behavior, geolocation, social media activity, biometric data, and financial status,” the senators wrote. “Former FTC Chair Lina Khan has cautioned against a particularly egregious but conceivable example of an airline using AI to charge a higher fare to a passenger ‘because the company knows that they just had a death in the family and need to fly across the country.’”
The senators demanded the airline provide them with information on the company’s plan to protect Americans from pricing discrimination, and to lay out which types and sources of data the airline will use to train the AI system, as well as how many routes and passengers the system will impact and what steps the company intends to take to ensure it complies with applicable federal and state laws.