Durbin Questions Witnesses On Protecting Consumers’ Privacy During Senate Judiciary Subcommittee Hearing
WASHINGTON – U.S. Senate Democratic Whip Dick Durbin (D-IL), Ranking Member of the Senate Judiciary Committee, today questioned witnesses during a Senate Judiciary Subcommittee on Crime and Counterterrorism hearing entitled “Your Data, Their Profit: The Consumer Cost of AI Surveillance Pricing.” Today’s hearing examined how companies can use consumers’ personal data to set a personalized price for individual customers by estimating how much or how little they are willing to pay for a product.
Durbin began his questioning by asking Hillary Caron, policy counsel at the United Food and Commercial Workers International Union (UFCW), about the Norwegian government’s crackdown on grocery store chains that were found to be price fixing.
Ms. Caron explained that the Norwegian Competition Authority found that three major grocery store chains in the country were colluding by constantly monitoring each other’s prices. Because these stores were using electronic shelf labels, management could quickly raise prices, sometimes several times a day, on products in high demand. The Norwegian Competition Authority fined the three Norwegian grocery store chains a combined $466 million for breaking antitrust rules. Ms. Caron underscored that the United States should learn from Norway’s example by more vigorously enforcing competition laws.
Turning to Dr. Z. John Zhang, professor of marketing at the Wharton School at the University of Pennsylvania, Durbin asked about what recourse consumers have to push back against surveillance pricing.
“I don’t think we give consumers have a fighting chance. The information that is being gathered about us involuntarily is hard to describe in terms of any limitations…It’s all designed in terms of measuring and influencing consumer behavior. Does the consumer have a chance?” Durbin asked Dr. Zhang.
Dr. Zhang explained that companies collect individuals’ data so they can understand their consumers as a whole in order to make marketing and price setting decisions. Dr. Zhang noted that companies collect far more information from consumers when they make online purchases than they do when customers purchase products in store.
Durbin continued his questioning by asking Robert Hedges, former Chief Data Officer at Visa, about swipe fees. Durbin has long advocated for cracking down on swipe fees, which is the aim of his bipartisan legislation, the Credit Card Competition Act.
“Many years ago, I walked into this room and sat down at the corner over there for [then-Senator] Arlen Specter’s hearing on swipe fees, interchange fees. I’d never heard of them. I listened and understood that if I had a business or restaurant in Springfield, Illinois, and I wanted to accept Visa and Mastercard, I had to pay a swipe fee—a percentage of a dinner I’m going to serve. The consumer still doesn’t know how much that is, yet that fee continues to be charged. Most retailers will tell you it’s a big piece of their profit. Is that fair?” Durbin asked.
Mr. Hedges explained that clarity and transparency on pricing should be a core principle of business.
Durbin concluded his remarks by asserting that Visa and Mastercard should be required to disclose what these swipes fees cost Americans every time they use their credit card.
“Our hearing is about information being gathered and consumers paying a higher price because of it. That is our concern. I think the Chairman [Senator Josh Hawley] has illustrated that pretty effectively. I think the same thing applies when it comes to Visa and Mastercard. I think there ought to be disclosure to the consumer about what you [Visa and Mastercard] are charging,” Durbin said.
Video of Durbin’s questions in Committee is available here.
Audio of Durbin’s questions in Committee is available here.
Footage of Durbin’s question in Committee is available here for TV stations.
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