Low battery, higher prices? California targets AI-driven pricing; bill to ban use of phone data for secret hikes

A California lawmaker is leading a bold push to ban companies from using personal data collected from phones, laptops, and other devices to secretly hike prices- an AI-driven tactic increasingly under fire from consumer advocates and lawmakers alike.

Senator Aisha Wahab , a Democrat from Fremont, has introduced legislation that would prohibit businesses from using AI to adjust prices based on information stored on customers’ phones, laptops, or other hardware.

The bill, which cleared the state senate in May, is now being considered in the Assembly. It is one of 30 AI-related measures introduced by the Legislature this year.

Wahab cited findings from Consumer Watchdog showing that ride-hailing apps charged more to riders with low phone batteries. Another investigation by ProPublica found the test prep company Princeton Review offered more expensive SAT tutoring to users in ZIP codes with high Asian populations.

“Our devices are being weaponised against us in order for large corporations to increase profits, and it has to stop,” Wahab said during an Assembly committee hearing in July.

Ride-hailing companies like Uber and Lyft have denied unfair pricing practices. Business groups, including the California chamber of commerce, and some Republican legislators are pushing back on the bill.

“This overregulation is impeding how we do business and how people want to do business,” said Assemblymember Diane Dixon, a Republican from Newport Beach. “I just believe that the market resolves these issues.”