### FTC Chair Warns of Potential AI-Driven Price Discrimination

The Federal Trade Commission (FTC) Chair, Lina Khan, has raised the alarm about a potentially dystopian future where airlines and other companies could exploit artificial intelligence (AI) to charge customers higher prices based on personal data. Speaking at the 2024 Fast Company Innovation Festival, Khan warned that what might sound like a science fiction subplot could become a stark reality.

Khan illustrated her concerns by discussing a hypothetical scenario where an airline might charge a grieving passenger more for a ticket upon knowing they had just suffered a family bereavement and urgently needed to fly. Although there are currently no reports or investigations suggesting airlines are engaging in this practice, Khan believes the increasing personalization of services, driven by AI, could pave the way for such pricing tactics.

Airlines have already introduced numerous fees for services that were once complimentary, such as checked baggage, seat selections, and carry-on luggage. The proliferation of these fees has not gone unnoticed; in March, the U.S. Senate intensified its scrutiny of the billions of dollars airlines generate from these surcharges.

Khan emphasized the broader implications of AI-driven "surveillance pricing," warning that digital companies' extensive collection of personal data makes it possible for firms to charge individualized prices based on consumer information. Notably, this issue extends beyond the airline industry. AI-targeted data utilization is widespread and has already appeared in scams and breaches, such as the 2017 Equifax incident that compromised the personal data of 147 million individuals.

Wendy's recently faced public backlash after CEO Kirk Tanner announced a significant investment in digital menu boards for testing dynamic pricing. Though intended to analyze consumer habits and adjust prices based on demand fluctuations, customers criticized it as a potential gateway to unwarranted price hikes. Wendy's later clarified that the technology would be used to offer discounts and product recommendations instead.

AI-driven scams have become a significant focus for the FTC. Khan noted that advanced tools allow fraudsters to spread scams more efficiently and extensively. For instance, voice cloning technology, capable of replicating a person's voice from a short audio sample, has emerged as a new threat. A recent McAfee survey of 7,000 individuals revealed that one in four had encountered or knew someone affected by a voice cloning scam, with nearly 77% of those targeted losing money.

To safeguard against these sophisticated scams, Khan advises consumers to avoid answering unknown calls and to verify any requests for money by contacting the person at their known legitimate number. As email phishing scams have also become more advanced due to AI, vigilance and verification remain crucial defenses.

Khan's warnings underscore the urgent need to reconsider how personal data and AI technology are utilized, ensuring that they don't become tools for exploitation in an increasingly digital age.