AI driven pricing raises concerns as Saskatchewan officials monitor impact

Concern is being raised about how artificial intelligence can influence prices on store shelves. Carla Shynkaruk tells us why experts say some companies get awa

The reality of AI-driven pricing is making its way into everyday life, and it has some in government looking to limit the effects, while experts say some companies are able to use it without most consumers even noticing.

Also known as surveillance pricing or dynamic pricing, the practice involves companies changing prices in real time based on consumer habits and algorithms.

David Williams from the Edwards School of Business at the University of Saskatchewan says while it may sound new, it’s already common online, just not in physical stores locally.

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“It’s been happening online for a long time. It’s known as dynamic pricing. So, Amazon, Uber, and Ticketmaster have been using dynamic pricing for a long time. And Amazon uses it and gets away with it. So, we don’t know it’s happening. When that happens with Ticketmaster or Uber, we get angry,” Williams told CTV News.

Grocery chains now have the technology to make this possible in-store, including electronic shelf labels that allow for instant price changes. With more consumers also buying groceries online, the shift could expand, but Williams says companies are cautious.

“It’s possible for them to use dynamic pricing. They’re not really adopting it now because of the risk of bad publicity.”

In Manitoba, legislation has been introduced to guard against AI or surveillance pricing. In Saskatchewan, Premier Scott Moe addressed the issue during Question Period in the Legislature this week.

“We’ve engaged with the federal government on real initiatives that can help control the inflationary price that Saskatchewan families and Canadians are seeing at the grocery store when it comes to online predatory pricing.”

The Consumer Protection Division of the Financial and Consumer Affairs Authority of Saskatchewan (FCAA) has indicated there have been no reported complaints of surveillance pricing impacting consumers in Saskatchewan. However, the FCAA will be closely monitoring developments in this area.

Saskatchewan has strong consumer protection measures in place to guard against unfair business practices, including prohibitions against misleading or deceiving consumers.

On the street, reaction is mixed, with some shoppers unaware of the practice, and others concerned about what it could mean.

“Well, to be perfectly honest with you, I personally am not noticing it, but it wouldn’t surprise me in the slightest if that was actually happening,” shopper Chad Merritt, said.

Another says the idea raises concerns about fairness.

“The price is the price… you’re trying to get the best price that you can, but at the same time, AI is trying to outsmart you to make you pay more. Yeah, that’s a concern,” shopper Bryant Moore said.

For now, experts say transparency will be critical as technology evolves and while dynamic pricing isn’t widespread in physical stores here yet, it’s an issue that continues to gain attention from both governments and consumers.