Delta’s AI pricing prompting consumer protection bill from Utah lawmaker

SALT LAKE CITY — A Utah lawmaker is seeking to prevent companies from setting prices for individuals based on their personal data, after Delta Air Lines announced it would use artificial intelligence to set some airfares.

The announcement from Delta, which has a hub in Salt Lake City, has received criticism from some on both sides of the political aisle, many of whom fear the troves of personal data available on many consumers could allow companies to price discriminate based on personal information. Delta plans to have 20% of its ticket prices set individually, using AI, by the end of the year to maximize what individual flyers are willing to pay, according to Fortune.

Airlines and other companies have used dynamic pricing for decades — it’s more expensive to fly over the holidays or to see a movie on a Friday night — but many worry that companies could take advantage of consumers by using artificial intelligence to comb through online data of individual customers.

“This idea of surveillance pricing, where not only is your data being collected on you, but then it is being used against you to price as much as you will pay,” Biden-era Federal Trade Commission Chairwoman Lina Khan told the Chuck ToddCast last week. “So, imagine you had a death in the family, and you got an email notice about where the services are going to be. You go to buy a plane ticket and the airline company knows you are trying to get to a funeral. It’s an emergency, and maybe they’ll overcharge you, right?”

A video of Khan making a similar argument was later shared by a conservative account on X, prompting Utah state Rep. Tyler Clancy to announce he is running a bill to prevent companies from pricing that way without consent from consumers.

“It’s also a huge invasion of your privacy,” Clancy, a Republican from Provo, told KSL.com. “I think that what my legislation is going to need to do is recognize this as not a recognized or acceptable business practice unless there’s an explicit opt-in provision. It shouldn’t be something that you opt out of.”

Delta did not respond to a request for comment from KSL.com, but told Reuters in a statement: “There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized offers based on personal information or otherwise.”

The company added that it is testing AI to eliminate manual processes and speed up analysis of pricing data and said all customers would see the same fares and offers.

Clancy said he believes companies should be able to set prices to meet demand as cinemas, restaurants and airlines do, but said he would make a distinction between relying on public versus private data.

“Cinemark or AMC Theatres can recognize, ‘Hey, Friday night, this is our peak pricing’ … so they’re being transparent about why you’re being charged more,” he said, adding that it would be different if a theater charged a weekly moviegoer less than it charged someone who was going to see the same showing with a friend visiting from out of town. “It’s the same night, it’s the same movie, but one person’s being charged more than the other.”

Delta’s pricing plans have also attracted attention from federal lawmakers, as a trio of Democratic senators have asked for answers from CEO Ed Bastian.

Details on Clancy’s proposal have yet to be released, with the next general legislative session still months away in January, but the lawmaker said he hopes to apply the policy broadly to protect travelers, renters and other kinds of consumers. He has yet to take the temperature of all his colleagues, but said he thinks the idea could be popular with Democrats and Republicans alike.

Clancy sees the bill as in step with Utah’s broader effort on online privacy and tech regulation, and hopes to give Utahns more say over how their data is used without sacrificing the state’s business-friendly stance.

“Consumer protection, I think, is largely viewed as more of a progressive issue, but consumer privacy, or privacy in general, is seen as more of a conservative issue,” he said. “I do think there’s a large overlap in setting some commonsense guardrails around this kind of really unique and invasive pricing that hopefully we can find some momentum here.”

Related: Delta Airlines rolls out new touchless digital ID program