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Internet Causes Price Descrimination, Privacy Loss

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Some people say, in a recent AP article, that the Internet can cause a certain kind of price discrimination. Here’s a snippet of the article:

NEW YORK – Conventional wisdom says the Internet gives consumers more power than ever.

After all, the Web is full of sites with product details and price comparisons that shed light on purchasing the previously inscrutable: mortgages, cars, insurance, airline tickets and the like. Priceline and eBay even let consumers declare the prices they want to pay.

But there’s a darker side to the equation.

The Internet also gives sellers more information about consumers than ever before – how many products they buy and when, perhaps even how many each can afford.

Privacy advocates probably will not be happy with this, but the folks in marketing and advertising firms, plus businesses who are seeking to more accurately target consumers, probably are happy about this, but they probably think it’s still not as good as those “live” wires in your homes that may one day be there, simply to pick up certain keywords to help businesses better target consumers with their marketing efforts, or to obtain information to sell to a third party.

No wonder permission marketing is becoming so popular with consumers.

-John Mudd

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About Mr. Real Estate

  • http://www.makeyougohmm.com/ TDavid

    Put me in the minority, I guess, on the internet privacy thing as far as allowing businesses to track my buying behavior.

    Some people are concerned about cookies tracking their moves, and I don’t get that either because one can easily kill his/her cookie files any time. For the super paranoid there are extreme measures like anonymizers, proxy servers, etc, so those who want to maintain their surfing privacy have many tools available to them. Individual preference.

    When I bought my cell phone recently there was GPS built into it. Almost every new cell phone these days comes with GPS built-in which they claim — at least for the present time — will only be used for 911 tracking. Riiight. There will be a zillion alternate uses for this — most of which do not have Orwellian proportions.

    Privacy is important, yes, but for those who are on the web, why should that be any more private than walking into a grocery store and shopping with a see-thru shopping cart?

  • http://macaronies.blogspot.com Mac Diva

    T, I think you are giving yourself away as being like me — the sort of person who doesn’t do anything shady online. People who look at and/or download pornography or other potentially embarassing behaviors probably feel differently about privacy than we do.

    Someone who tracked me online would end up wondering why I spend so much time at the NYT, Electric Library and Salon. They’d likely be bored to tears.

  • http://www.shortstrangetrip.org Joe

    I think you miss the point with regard to price discrimination. What John is pointing out is that through the collection of personal information a company will be able to set the price based on what what it knows about you rather than on establishing a fair market value.

  • http://www.makeyougohmm.com/ TDavid

    Joe – if an online company/website researches that I like say the Simpsons — then they should offer me special pricing, discounts or deals over those who refuse to give them this information (though methods that I described in my first post) as an enticement to do business with them.

    For example, The Simpsons Season 3 DVD has been released today and Amazon is already featuring it for me based upon my preference settings and surfing habits — smart on their part. If it was at a reduced rate over their normal price I’d probably be willing to wait the extra day or two for shipping. They are also suggesting for me to preorder the much anticipated Indiana Jones trilogy (another wise selection). Again, if I got a special discount or pricing over those who chose not to allow them to track their information, I’d be more likely to buy.

    Now if companies use this information to gouge customers, charging them more than they would charge someone else on the fair market: that would naturally be wrong.

    But tailoring or customizing pricing and special deals is something that the casino/gaming industry has been doing for ages. Rewarding players for their play, both figuratively and literally.

    So if there is discrimination, it’s discrimination based upon those who are smart enough to track the information as opposed to those who haven’t figured out that they could — or should — be tracking their user’s activities.

  • http://www.homeintampabay.com John Mudd

    What I was trying to point out was that the information could be used to take advantage of consumers by misusing the information to set an artificial, non-market oriented, price, and that the invasion of privacy isn’t always beneficial, and that consumers aren’t always informed of the invasion.

    I personally think privacy died a long time ago when credit and debit cards were invented. I’m sure my bank tracks my every purchasing move, although, I haven’t seen how they’ve misused the information.

    I do think that if companies are collecting the information to decide what prices are, or if they’re using it to help target you with their marketing via the use of specials, etc., that it should be disclosed to the consumer, and it isn’t always disclosed.

    I hope that better clarifies my point. Next time I’ll be sure to link to the article.

  • http://www.templestark.com Temple Stark

    though post and spam are the same – spam erase

  • http://paperfrigate.blogspot.com DrPat

    Isn’t it amazing how long it takes these jerks to realize that their spam won’t survive here?

  • Nancy

    I resent that these companies I do business with feel free – against my specific instructions – to collect and sell/lease/rent/”share” my data. My data is MY data, not theirs. My name, my address, my phone number, e-mail address, birth date – all these are my personal belongings, just like my car or my blood, and should not be legally the grist for anybody’s profits. Especially in the wake of all these damned info companies losing or being hacked of all the data they’ve collected on literally millions of people, why isn’t congress moving to restrict personal data collection & sales? At the very least, it should be illegal to do so without the individual’s specific consent, and not just as a micro-print ‘opt-out’ (if it’s offered at all, which with these companies, it’s not). Their presumption of our personal information is not only arrogant & dangerous, it’s stealing: the same as stealing my car, my home, or taking my blood w/out my permission. It needs to come to a halt. And the only ‘porn’ I like to look at is “rose porn” (i.e. rose-growing catalogues).

  • http://victorplenty.blogspot.com Victor Plenty

    Now there’s some odd spam.