Toronto's mayor is taking aim at a data-driven pricing tactic that critics say quietly inflates what shoppers pay at the checkout. Mayor Olivia Chow is putting forward a motion to regulate what is known as surveillance pricing, a practice in which companies use a customer's personal data to decide how much to charge them, particularly on groceries.
Surveillance pricing is different from the dynamic or surge pricing that many people already know from services like ride-hailing, where the cost of a trip can change with the time of day or how much demand there is. Instead, it draws on a shopper's own online data, from browsing history to a postal code, to estimate the most that person would be willing to pay, and then sets a price accordingly.
Chow says she wants to crack down on the practice where it drives up grocery prices, including for food that people order online and have delivered to their homes. In a motion to the city's executive committee, she is asking officials to look into how Toronto could regulate, and potentially ban, the tactic within the city.
The mayor pointed to the United States as a warning. Reports indicate that companies including Walmart and Amazon are among those using surveillance pricing there, and Chow argued that because the practice is already commonplace south of the border, it will not stop at the border unless governments choose to act against it.
How widespread the practice is in Canada remains unclear, and it is uncertain whether it is being used on groceries at all. Still, the federal Competition Bureau has flagged that dozens of companies operating in the country claim to help businesses optimize their pricing using algorithms, suggesting that the tools are at least available to retailers here.
The motion stops short of an immediate ban. Instead, it asks city staff to examine the legal avenues Toronto actually has to address the issue, an acknowledgment that a single municipality cannot tackle the problem entirely on its own without support and coordination from other levels of government.
Others have already tried. In Manitoba, legislation was introduced earlier this year to ban surveillance pricing, and at the federal level, NDP leader Avi Lewis put forward a bill to outlaw it, though that effort was voted down. Ottawa has said it will look into the practice as part of its broader strategy on artificial intelligence, while Councillor Alejandra Bravo, who seconded Chow's motion, plans to file another asking how other governments can help.