At The Money: Is Technology Price Gouging Consumers?

Lots of forces are driving prices higher. But what about Artificial Intelligence, Algos, Surveillance Capitalism, and other technologies we all use every day? Might they be sending prices higher? Lindsay Owens is CEO of the Groundwork Collaborative, a DC-based economic think tank and author of a new bestseller, “Gouged: The End of a Fair Price—and What That Means for Your Wallet.” Each week, “At the Money” discusses an important topic in money management. From portfolio construction to taxes and cutting down on fees, join Barry Ritholtz to learn the best ways to put your money to work. See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

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• 2:11Barry Ritholtz?

  The war in Iran, tariffs, higher interest rates, lots of things are driving prices higher. But what about algos and AI and other technologies we use every day? Might they also be sending prices higher? To help us unpack all of this and what it means for your wallet, let's bring in Lindsay Owens. She is CEO of the Groundwork Collaborative, an economic think tank in DC, and former economic policy advisor to Senator Elizabeth Warren. She is also the author of a brand-new bestseller, Gouged: The End of a Fair Price and What That Means for Your Wallet.

• 2:54Barry Ritholtz?

  So let's start with the basic theme of the book. Hey, price gouging isn't anything new. It's been going on for forever, but the technology that allows faster, more subtle, and more hidden price gouging to take place is what's new. How has technology made fair prices and competition almost obsolete?

• 3:20Speaker 05

  Yeah, well, thanks for having me. This is a great question to start with. Look, of course, the impulse to make a buck is not new. It's age-old. What's new are the technologies at companies' disposal. But it's also the case that pricing used to be pretty straightforward. You figure out how much it costs to make the item. You add your profit margin on top. You put a sticker on it. You set it on the shelf. You forget it. Not anymore. Today, pricing is a highly engineered science. Companies hire armies of pricing consultants. They hire physicists. They acquire AI companies, all to help them get better at squeezing you and reaching further into your wallet.

• 4:04Speaker 05

  And so the book really examines a whole host of ways that new technologies have supercharged older corporate tricks.

• 4:14Barry Ritholtz?

  So everybody experienced that inflation moment during the pandemic. You couldn't get bleach or toilet paper, and all these things went up in price. I'm curious, when you had that aha moment where, hey, this is more than just companies raising prices, something in the marketplace has fundamentally changed.

• 4:36Speaker 05

  Yeah, look, I wasn't alive during the last period of high inflation. We just lived through the first period of inflation in 50 years. So this was a new experience for me as a human, but also as someone who thinks and studies economic policy. And I wanted to understand how businesses were navigating inflation. So I listened in on their earnings calls with their investors. And what I was surprised to hear is companies were quite bullish on their ability to navigate inflation. They felt like they were going to be able to pass along their rising costs and even go for more in some cases. But as I started digging into that research more deeply over 2021, 2022, and even into

• 5:19Speaker 05

  2023, something else started to stick out to me as well. The way in which companies were describing their pricing techniques had changed. They were talking about their new price optimization and revenue management systems, their new yield management systems. They were talking about new technologies, dynamic pricing and electronic shelf labels in the grocery store, at the drive-thru line. And I started to think, hmm, there's really something here. This isn't just high prices. This is a shift in the infrastructure and the sort of mechanisms of pricing, and I want to learn more. And that's really what got me going down the rabbit hole that ended up as Gouged,

• 6:04Speaker 05

  my new book.

• 6:05Barry Ritholtz?

  So one of the things in the book that I found outrageous, although I bet a lot of us found it outrageous if we followed the story when it was breaking, was the YieldStar algorithm. That is a company named RealPage that effectively engaged in what turned out to be price collusion. The software allowed coordination from all these supposedly competitive landlords and ultimately created a floor, no pun intended, for rents, a hard floor that nobody could lower rents below, stopping competition. Tell us about RealPage.

• 6:44Speaker 05

  Yeah, so RealPage is super interesting because what it represents is sort of an exponential shift in what's possible for price fixing and collusion. Look, if you wanted to collude in the olden days, you would need to gather up all your competitors, get together in a hotel room or a conference room, you know, pour some scotch, and hatch a deal to keep prices high, align prices. And, you know, you need a little bit of trust. You got to make sure one of you isn't going to defect, right? And sort of undercut all of the rest. And everyone needs to lock arms and hike prices together. Well, that requires a lot of coordination.

• 7:28Speaker 05

  It's probably only possible in industries that only have a few major players. Well, today, thanks to algorithms, even in industries with many players, like the residential real estate market, where there are, you know, in any given city, thousands of landlords, thousands of different types of units, thousands of buildings, you know, it would have been hard to put together a price fixing scheme. But now, there's software for that, and landlords can join in on what could amount to a price fixing conspiracy, you know, with the tap of their iPhone. And YieldStar, the revenue management software that RealPage acquired, allows landlords

• 8:12Speaker 05

  to share competitively sensitive information about floor plans and amenities and price points, but it also spits out recommended rents. Now, of course, landlords don't have to take those recommendations, but many landlords opted into the default mode where they basically did take the recommendations. And so in late 2024, the Biden administration's head of the antitrust division at the Department of Justice brought an alleged price fixing conspiracy charge against RealPage. And my book actually opens with the Federal Bureau of Investigation's dawn raid into one of the big developers, Cortlandd Management in Atlanta, Georgia, who was using the RealPage software.

• 8:58Barry Ritholtz?

  How much was RealPage impacting rents? And what was the outcome of that case?

• 9:05Speaker 05

  Yeah, so they ultimately settled with the Trump administration who, you know, I would argue it was a bit of a slap on the wrist, but they did curtail some of the most egregious aspects of RealPage. Interestingly, RealPage wasn't just a tech company. They were also facilitating in-person meetings with landlords. And the Trump administration said you can't do the meetings anymore. And RealPage used a team of pricing advisors who were kind of the brawn. If the algorithm was the brain, the pricing advisors would sort of make sure that the landlords were taking the prices, you know, call them and say, look, you gotta, you gotta trust the science. You gotta take these prices. And, you know, the Trump administration

• 9:46Speaker 05

  says the pricing advisors are not allowed to share competitively sensitive information. Now, that's going to be pretty hard to enforce in practice, because if you're a human and you know something, it's hard to remember, you know, who you, who you learned it from and, and not to share it. So, you know, we'll see kind of what happens with RealPage over the next few years. But by some estimates, RealPage's impacts on rental markets could be as much as like $120 a month.

• 10:16Barry Ritholtz?

  Wow, that's real, that's real money. It's interesting how you describe the, the advisors coming in. Kind of reminds me of the consultants. So instead of having the CEO of Coke and Pepsi in a room, you have a go-between with the same consultants that advise Coke and Pepsi and everybody else. How is that anything but price fixing? How is that anything but non-competition?

• 10:43Speaker 05

  Yeah, I mean, look, price fixing has gone really high-tech. You know, companies are, you know, working with new startups who are helping them get better and more aggressive with their pricing. They tell them when to raise their prices. They tell them when to hold firm and not lower their prices. They track competitors' prices. It's, it's a really, it's a really extensive industry at this point.

• 11:12Barry Ritholtz?

  So I am much older than you, and I have a very vivid recollection of antitrust law kind of being, okay, we're not going to enforce this anymore, from, from back in the 1980s. And here it is 40 years later. And we've seen two things happen as a result. Massive consolidation in various industries and significant competition, either being restricted or drive, drying up. Think about airfares. Concert tickets are probably the most egregious one. But even things like food, liquor, automobiles. It seems like we've allowed all these companies

• 11:55Barry Ritholtz?

  to buy each other, and there's no one left to compete against on price.

• 11:59Speaker 05

  Yeah, absolutely. Concentration in our economy, 75% of industries more concentrated now than they were a generation ago, is terrible for prices. And it is really hard to overcharge you if you can walk across the street and get a better deal. And so as competition shrinks, as consolidation increases, it's really a Petri dish for these, you know, more sinister and nefarious pricing technologies. But some of what these technologies also enable is the restriction, the seeming restriction of competition, even in markets that are more competitive. So when you're being offered a personalized price, if, if

• 12:44Speaker 05

  a company selects a price just for you, you know, how are you going to comparison shop if you're not actually being offered the standard price? And of course, comparison shopping is sort of the mechanism through which competition keeps prices in check, right? It's the shopper, the budget shopper who goes to store A, says, hmm, this seems a little high to me, walks across the street to store B. Enough people do that. Store A merchant says, hmm, nobody's in the store today. Maybe I've got to lower my prices. So a lot of these new technologies sort of, you know, do an end run around some of the, you know, competition that keeps prices in check in our economy.

• 13:24Barry Ritholtz?

  So I'm not sure if I read this in the book or elsewhere. I'm kind of fascinated by the concept that you can pull up to a drive-through at, you know, McDonald's or Chick-fil-A or whatever your favorite fast food is. They have an automatic license plate reader where they scan your plate. They look up on the state database, the zip code the car is registered to. They can tell, is that a high-income zip code or a not-so-high-income zip code, and raise prices accordingly. Is the car I take going to impact what I'm

• 14:06Barry Ritholtz?

  going to pay for McNuggets at, at Chick-fil-A or McDonald's?

• 14:10Speaker 05

  Yeah, so this is not an example that's in the book. But what I, what I can tell you is the data that companies are collecting about you, or planning to collect about you, or building the capabilities to collect about you, includes everything you just described and then some. There is a patent that Walmart applied for to use imagery, imagery to tell if your car suspension has changed from when you enter the store and exit the store. The idea being that, you know, if you leave the store with quite a bit of product, your car will be heavier, for example. There is surveillance that's being built in companies

• 14:54Speaker 05

  to figure out how old your kids are and follow them throughout their developmental life course. So they know when you're going to start swapping out bottles for sippy cups and can charge you more for sippy cups. There is all sorts of information that companies can collect about your geographic location from where you log in. Even in e-commerce, not, they don't need your license plate. They can tell, you know, from your IP address where you log in from. And there was an example where Expedia was charging people from higher-income geographies more for the exact same hotel room in Manhattan than people from lower-income geographies. So I think, you know, all of this technology is, you know, these types

• 15:38Speaker 05

  of pricing technologies, the engine that fuels them is your data. And as corporate surveillance expands, the types of data that these companies collect is, is really quite expansive and intrusive.

• 15:52Barry Ritholtz?

  I don't remember if I heard you say this somewhere, or if I read it. There was something about if you have tuna fish in your shopping cart and the technology alerts, maybe it was Walmart, that you have that, and you grab mayonnaise, they're going to charge you more for the mayo because you have tuna.

• 16:12Speaker 05

  Yeah, so Walmart is very mad at me for talking about this. And they wrote me an open letter on Monday night about, about this. But I, you know, they're, they're trying to position it as a he said, she said. But it's a he said, he said, because my information is pulled from their patent. They filed for a 2023 patent that did exactly what you described. Used scan-and-go technology, connected to electronic shelf labels to track what you were already buying, say tuna fish. And by the way, their example in the patent was tuna fish and mayonnaise. So you have tuna fish in your cart, the price would change for

• 16:55Speaker 05

  mayonnaise. And this was the example that they gave the United States Patent and Trademark Office. They have since said they're not using this patent, even though they built the technology and filed for the patent. And the patent lasts through 2039. And they have said that they will not renew the patent in 2039. You know, that doesn't give me a huge amount of comfort. But that's the, that is indeed their, their 2023 patent.

• 17:25Barry Ritholtz?

  So, so the phrase that I've heard over and over again is either surveillance capitalism on the corporate side, or surveillance pricing on the consumer side. Most of the examples in the book are exploitive and negative. Is there any way this can be used for the public good? Or is this simply a way to squeeze every last penny out of consumers that that's possible?

• 17:50Speaker 05

  Yeah, look, I mean, I do think overall, this is pretty bad news for consumers. But I'll give you a couple of examples of how you could use this technology for good. So electronic shelf labels in grocery stores, they've actually been in Europe for a long time, and they're just newer in the United States. But, you know, one thing that you can do with an electronic shelf label is very quickly discount items on the shelf. And if you're concerned about food waste, for example, you could quickly discount items that are about to expire. So that would be one way to use an electronic shelf label, both to reduce food waste, but also to offer food at a deep discount for someone who, who needed it, right, to feed their families. So, so that's one example I'll give.

• 18:35Barry Ritholtz?

  What was fascinating in the book, because there are a lot of emails and a lot of litigation that has found stuff, people say things. You would have thought the Microsoft antitrust case would have taught people to never put damning things in email. But when the CEO of Kroger says, "A little bit of inflation is always good in our business," I'm always kind of shocked at that. In the RealPage YieldStar case, what these guys admitted to was effectively just backslapping how much they're cranking up rents and all but admitting to price fixing. What is it about retailers that allows them to think that

• 19:19Barry Ritholtz?

  the consumers are just going to keep taking it?

• 19:22Speaker 05

  Yeah, I mean, this is one of the things that is so frustrating about the conflict with Walmart, is they say one thing to consumers and in letters to people like me, but they say another thing to their investors behind closed doors, and they say a different thing entirely to the patent office. And the book is filled with examples of what companies tell their investors. I mean, one of the pricing tactics that my organization exposed a couple of years ago was Delta's partnership with Fetcher. Fetcher was this sort of artificial intelligence company out of Israel. They still exist. And Delta had teamed up with Fetcher

• 20:07Speaker 05

  to hike prices on flights. And we didn't do any particularly sophisticated investigative research to find this out. It was all in the transcripts of Delta's Investor Day calls. Their CEO, Ed Bastian, couldn't shut up about how great Fetcher was and how much fun they were having with Fetcher and how big the revenue boost with Fetcher was. And they initially gave this AI company 1% of their fares to muck around with. And they liked what they saw. So by the end of the year, they were going to give it 20% of their fares to muck around with. So it is interesting what these companies will say to investors.

• 20:48Speaker 05

  I mean, look, their incentives are different in those spaces. They're trying to make sure that folks think that their business model is strong, that their revenue projections are strong, that they've got really good ideas for the future. Maybe they're trying to juice the share price because their compensation is tied to it. I don't know. But they say a lot of things that, when consumers find out, don't look so good.

• 21:10Barry Ritholtz?

  Tell us about what Instacart was doing with their dynamic pricing. It led to quite the backlash and ultimately, they ended up giving it up. Or did they?

• 21:23Speaker 05

  Yeah, so my organization teamed up with Consumer Reports and More Perfect Union, and we ran an experiment that exposed a much bigger experiment that Instacart was running on millions of Americans while they shopped for groceries. We got 400 volunteer secret shoppers. We had them fire up the Instacart app. We had them set the same pickup location, a grocery store in Ohio, or Seattle, or Washington DC. Then we had them put the exact same 23 items in their cart, a dozen eggs, a pound of turkey, deli meat, a box of Frosty Flakes, things like that. All the normal stuff you'd buy at the grocery store. And then we said, "Look, just take a screenshot of your cart so that we know how much they

• 22:07Speaker 05

  charged you for each item in your cart." And then a team of research assistants at Groundwork took all the screenshots, entered them into an Excel spreadsheet, and just crunched the numbers. And what we found is, for almost 75% of the items in the cart, Instacart was charging some shoppers different amounts than other shoppers. And those differences were as high as 23%. So you could be charged 23% more than me for a dozen eggs at the same Safeway grocery store in Washington DC at the exact same time. It was pretty stunning. We estimated that, in some instances, this could cost $1,200 a family over the course

• 22:50Speaker 05

  of a year, which is a month's rent in a lot of major American cities.

• 22:53Barry Ritholtz?

  So what ultimately happened when this was revealed?

• 22:56Speaker 05

  Yeah, I mean, it was a pretty big story. It was on the front page of the New York Times. It was the cover of the New York Post. People were pretty ticked off. Consumer backlash was considerable. Maple Bear, the publicly traded company, their stock plummeted. The Trump administration's FTC announced a probe. The New York Attorney General announced a probe. There was a pretty swift backlash. And about two weeks after the study was released on December 22, 2025, Instacart put a blog post up on its website saying that they would stop running these experiments on consumers, and that consumers who were shopping at the

• 23:41Speaker 05

  same time from the same store would get the same price.

• 23:44Barry Ritholtz?

  So here's some of the, I don't even want to call it defense, but here's, some of the responses have been, "Hey, we're going to charge some people more, especially if they come from a high-income ZIP code and won't even notice. And that allows us to charge less in the lower-income ZIP codes." Is that just spin, or is there any truth to it?

• 24:09Speaker 05

  Yeah, I call this the corporate Robin Hood theory of surveillance pricing. Steal from the rich to give to the poor. Look, I think the truth is, the goal of surveillance pricing is to squeeze everyone as much as they can. And so, maybe if you don't have as much money, you'll only get squeezed a little. And if you have more money, you'll get squeezed more. But I think everyone will suffer. The other thing I'll say is, it's not always the case that willingness to pay and income are the same thing. Sometimes you have a high willingness to pay because you're desperate. You've got to get that plane ticket to get to a funeral. Or you're a mom like me, and you've got a sick kid, and you'll probably pay $15 for children's Tylenol. So I think as companies get better at ascertaining

• 24:51Speaker 05

  our willingness to pay, I don't really think it will matter what your income is. I think they will be pretty good at taking what an economist might call "all of the consumer surplus."

• 25:02Barry Ritholtz?

  So, last question. I came of age when the internet and e-tail was ramping up, and the promise was, it was going to be a consumer wonderland. You would be able to comparison shop. You can find prices everywhere, and consumers would have much better bargaining power. That doesn't seem to be what happened. If anything, we know very little about how prices are created, but the retailers seem to know a whole lot about us and are charging us accordingly. Is that fair? Is that a fair assessment?

• 25:40Speaker 05

  Yeah, I mean, I do think we were promised more transparency, more power for consumers, and lots of benefits of e-commerce. And I think what my book shows is, in many cases, those promises haven't been met, and we've been betrayed in that sense. And actually, what these technologies are doing is creating more opacity. They're more manipulative. They're more coercive in some cases. So it's obviously really frustrating to see. But everything old is new again. And now we have agentic commerce coming onto the scene, AI shopping

• 26:18Speaker 05

  assistants, and they're promising to help you navigate the shopping hell that is e-commerce, right? Meta's Muse is promising to help you cancel all those subscriptions you've been trapped in, for example. So we're on the precipice of the next kind of phase of this conversation about what technology will promise. And of course, we have to be on the lookout for peril as well. What will these AI shopping assistants be able to do with all of the data they get from us? What will happen when an AI agent has access to your wallet? Will that be good or bad? You decide.

• 26:57Barry Ritholtz?

  So to wrap up, prices are higher for a variety of reasons. Everything from war to tariffs, to just yields going up. But don't underestimate the impact of technology helping retailers pull every last dollar they can out of your wallet. I'm Barry Ritholtz. You're listening to Bloomberg's At the Money.

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