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Opinion: Hands off my online surveillance pricing!

Proposed bans on algorithmic pricing probably aren't workable and wouldn't address meaningful harms even if they were

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Surveillance pricing is suddenly the hot political topic in Canada, and most of what’s being said about it is only half-right. So let me try to explain it the way I’d explain it to a 10-year-old.

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John and Jane both want to buy a cookie from Acme Cookie Co. online. John is browsing on a new MacBook from a nice postal code. Acme’s algorithm clocks him as willing to pay more and shows him the cookie for $3.50. Jane is on a battered Android tablet from a low-income neighbourhood, and her phone battery is dying. The algorithm reads her as price-sensitive and shows her the cookie for $2.50. Same cookie. Same company. Same moment. No one is forced to buy.

Under Manitoba’s new Bill 49, that is illegal. But now watch what happens next. Acme’s lawyers read the Manitoba bill, and the next morning Acme lists the cookie at $3.50 for everyone. Then it quietly emails Jane a coupon for a dollar off. Jane pays $2.50. John pays $3.50. Exactly the same result as before, except now it’s legal. Do you see the problem?

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Manitoba’s bill and similar ones the NDP is pushing in Ottawa and Queen’s Park all ban one direction of the same practice. Raising a price based on your data is out. Lowering a price based on your data is in. The bill explicitly preserves every loyalty program in the country. PC Optimum, Scene+, Air Miles, Canadian Tire Triangle: all untouched. Which means the moment the law passes, every retailer pivots from upward pricing to downward couponing and nothing changes for the shopper. The statute is obeyed. The NDP gets its press release. Jane still pays less and John still pays more, for exactly the same reasons as before.

That’s the practical problem. The factual problem is worse. Our own Competition Bureau ran a consultation on algorithmic pricing last summer and published its “what we heard” report in January, drawing on 103 submissions. Its honest conclusion: separating surveillance pricing from ordinary dynamic pricing is hard. Britain’s Competition and Markets Authority said the same thing back in 2018. It also found little evidence of true individualized pricing in the wild. The OECD survey of European studies lands in the same place.

Even the U.S. Federal Trade Commission’s January 2025 staff perspective, the paper that kicked all this off, leaned on vendor-reported numbers and hypothetical examples, because trade-secret rules blocked it from naming a single respondent. Every regulator who has looked has come back saying the same thing: something is happening but it isn’t yet widespread and the evidence of systemic harm to consumers isn’t there.

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Two of the 26 stakeholder submissions to the Competition Bureau frame the choice. The Canadian Marketing Association cited research on Airbnb’s pricing algorithms showing an 8.6 per cent revenue lift for hosts at prices 5.7 per cent lower for guests. Both sides gain. That’s what price discovery looks like when it works. Option consommateurs, the Quebec consumer group, raised the opposite concern: algorithmic pricing makes it harder for shoppers to compare products and for regulators to catch collusion. Both groups are right about what they see. Neither argument gets you to a ban.

And we don’t need one, because the tools to stop actual abuses already exist. The Bureau spent much of last year investigating RealPage and Yardi over algorithmic rent-setting and concluded it hadn’t reached the Competition Act threshold. That’s the system working.

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Quebec’s Law 25 already gives residents the right to know when a consequential decision about them was made exclusively by an algorithm, and to demand a human review, with penalties reaching a draconian four per cent of global revenue. Canadian human-rights codes already prohibit pricing that discriminates on protected grounds. Consumer-protection statutes already prohibit deceptive practices.

A broader ban, on the other hand, cannot touch Amazon, Booking.com or any U.S.-hosted retailer selling into Canada. The compliance burden lands entirely on our own firms, and hardest on small ones with no in-house lawyers. Firms that can no longer personalize discounts will raise uniform prices, and low-income shoppers will pay most of the increase. Jane loses her coupon. John’s price doesn’t move.

There’s a better path, already law in New York since November. Disclose. A plain-language label: this price was set by an algorithm using your personal data. Let shoppers see it. Let competitors undercut it. Let regulators audit when something looks wrong. Enforce the privacy, competition and human-rights statutes already on the books. Come back to the harder question when we actually have Canadian evidence, not just American anecdote, of systemic exploitation.

Canadians probably do resent being profiled at the checkout. But Manitoba’s draft bill bans only what firms can trivially work around, and the federal version new NDP Leader Avi Lewis wants would hurt consumers more than the practice it targets does.

Leave my surveillance pricing, and my discounts, alone.

Richard Ciano is a market researcher and business insights executive.

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