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Ban Secret Price Discrimination

Encouraging more competition for data platforms and empowering individual users to control their data will still fail to protect many consumers, especially in areas of consumer harm where the danger is obscure, in the future, or deliberately concealed.[i] Because many areas of misuse such as price discrimination, racial profiling and many of the other systematic categorical profiling harms are not obvious when the data is shared and not even fully visible to the people effected by those harms, if policymakers depend only on transparency and consent they will inherently fail to address known harms.  On one level, a range of transparency and consent rules covered subprime mortgage borrowers, yet mass scale discrimination and exploitation was widespread.  Better transparency can help but when the harm is companies using data to find people who ignore proffered information (Varian's "myopic" customers), transparency and consent has to fail. 

One clear step would be to bar data platforms from engaging in price discrimination or from knowingly facilitating price discrimination where different groups are secretly offered different prices by its advertisers for the exact same product or service.  As Joseph Stiglitz and Steven Salop argue, government can economize on wasteful information costs in the economy by “eliminating the price dispersion” associated with price discrimination.[iii] 

[i] Chris Jay Hoofnagle, Ashkan Soltani, Nathaniel Good, Dietrich J. Wambach, and Mika D. Ayenson, “Behavioral Advertising: The Offer You Cannot Refuse,” 6 Harvard Law & Policy Review 273 (2012)  (“We empirically demonstrate that advertisers are making it impossible to avoid online tracking.” Study looks at online tracking of cookies and ways companies evade user decisions to refuse tracking)

[ii] Frank Pasquale, Beyond Innovation and Competition, 104 Nw. U.L. Rev. 105, 154 (2010)

[iii] Salop and Stiglitz at 494.

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