AI knows what you'll pay before you do — how surveillance pricing is costing Canadians more and what to do about it

That single line, first highlighted in a Washingtonian investigation (1), has pulled back the curtain on a pricing strategy many consumers don’t realize is already shaping what they pay for groceries to airline tickets.

From surge pricing to “surveillance pricing”

Dynamic pricing isn’t new.

Airlines have long adjusted ticket prices based on demand. Ride-hailing apps increase fares during busy periods and hotels charge more during peak travel seasons.

In Canada, regulators describe this as a system in which prices adjust in real time (2) based on factors such as demand, supply and timing.

But advances in artificial intelligence have introduced a more personalized layer. Companies can now set prices based not just on market conditions, but on your behaviour.

This emerging model is known as “surveillance pricing.”

A 2025 study by the U.S. Federal Trade Commission (3) found companies are already using personal data — including browsing history, location and online activity — to tailor prices to individual consumers.

Canadian experts say the same shift is happening here.

A discussion paper (4) from the Competition Bureau Canada notes that AI-driven pricing systems can continuously learn from user data and market responses which allow companies to adjust prices in real time with minimal human oversight.

What data are companies using?

The Washington Post has not publicly detailed its pricing algorithm. However, Luca Cian, a University of Virginia business professor, told The Washingtonian (5) that such systems typically rely on a mix of demographic signals, behavioural data and inferred income.

These factors can include:

• Device type: Premium devices may signal higher purchasing power
• Location data: Postal codes to estimate income levels
• Usage behaviour: Frequent users may be charged more because they appear to value the service more
• Purchase or subscription history: Patterns of renewal, cancellation or engagement

In other words, the system is trying to predict how much you personally are willing to pay.

While the Post disclosed this practice, most companies don’t — even though it is increasingly common.

In Canada, regulators and industry observers report that companies use algorithmic pricing across sectors, from retail to transportation (6).

And the trend is moving beyond online shopping.

A Retail Insider report (7) found AI-powered pricing — including digital shelf labels — could allow grocery prices to change in real time in physical stores which raises concerns about affordability and fairness.

Sylvain Charlebois, Dalhousie University professor of food distribution policy and senior director of the Agri-Food Analytics Lab, argues (8) that cost and competition, not AI, should drive food prices.

Can you avoid it?

Most consumers agree to extensive data collection when they accept user agreements (9). Once accepted, companies can create a detailed digital profile to gauge pricing decisions.

Here are some practices to preserve your privacy:

• Using a VPN to mask location
• Browsing in private or incognito mode
• Avoiding logged-in sessions

Still, modern pricing systems rely on a wide range of signals, and avoiding them entirely can be inconvenient.

Even Canadian regulators (10) acknowledge that these systems are becoming more complex and less transparent over time, which make it harder for consumers to understand how prices are set.

What regulators are doing next

Canadian regulators are beginning to take notice.