Digital Discrimination: THE REAL REASON CORPORATIONS WANT TO INVADE YOUR PRIVACY.

• Author: Longman, Phillip

In 2016, hackers broke into the servers of the ridesharing company Uber. The haul included the personal phone numbers and email addresses of fifty million Uber riders and the license numbers of some 600,000 drivers. Rather than report the breach to regulators or disclose it to the public, the company paid the hackers $100,000 to delete the data and keep the breach quiet.

Since then, we've seen a cascade of egregious cases of corporate misuse of Americans' personal data, including Facebook's Cambridge Analytica scandal and the massive Equifax records breach. As a result, official Washington is finally sending signals that it intends to do something serious about internet privacy. The Federal Trade Commission's Republican chairman, Joseph Simons, is urging Congress to grant the FTC new enforcement powers to prosecute the worst offenders. A recent report by the Government Accountability Office warned that the U.S. lacks comprehensive legislation governing the use of online personal information by private-sector companies. In late February, the House and Senate began hearings on how to craft such a law.

Yet the debate over internet privacy has so far ignored what may be the most significant privacy issue of all: price discrimination. Perhaps you missed it, for example, when in 2017, an Uber executive admitted in an interview with Bloomberg News that the company had taken its familiar "surge pricing" model to a whole new level. Under the old model, it raised prices for everyone in a certain location when local demand became strong. The new fare system, called "route-based pricing," is essentially micro-surge: the company sets rates according to what it thinks each individual customer is willing to pay based on factors including how poor or affluent their destination is.

Uber is hardly alone in its attempt to engage in ever finer degrees of price discrimination. Marketers have always offered different prices and deals to different kinds of customers. Sometimes this is benign, as when companies give discounts to students or veterans, for example. But the combination of Big Data and Big Business is making possible something different in kind: giving some of us far worse prices and terms of services than others, based not only on our membership in different demographic groups but also on our individual characteristics, as revealed by our online activities. When it comes to the greatest abuses of our personal data, the debate should not just be about who has access to it. It also needs to be about the already acute problem of how corporations use our data to discriminate in the marketplace--not only against consumers, but also as producers and sellers--and how to keep it from getting much worse.

You probably know by now that companies use your data to try to sell you more stuff. "Behavioral advertising," as it's called, certainly can be creepy. I once heard of someone in the United Kingdom who, after searching the internet for information about stage 4 breast cancer, started seeing ads for funeral homes. But, at least within limits, most people don't seem to particularly mind seeing targeted ads. Personally, if I've spent an evening googling the properties of bicycle snow tires, I won't feel particularly violated when I start seeing banner ads about the virtues of, say, Schwalbe Ice Spiker Pro tubeless-ready winter bike tires, available from Amazon for $121.47. If I start seeing more listides touting "Nine Insanely Affordable Caribbean Winter Vacations," I can live with that, too, even if the algorithm is mistaken in concluding that my interest in bicycle snow tires implies an interest in flying to Aruba. At least this kind of behavioral advertising is better than seeing endless ads on cable news channels touting cures for obscure maladies I don't have or care if I do. ("Ask your doctor about Peyronie's disease.")

By contrast, what I really don't want is for the price I pay for bicycle snow tires, or vacation packages, or prescription drugs, or anything else, to be inflated just for me based on what my internet behavior reveals about my location, personal habits, health issues, tastes, or ability to pay. Nor do I want my online searches for cancer cures or alcohol treatment centers to lead my health insurer to cancel my coverage or my employer to quietly lay me off. Similarly, I don't want to be discriminated against because some algorithm somewhere has sliced and diced me into...