What AI is actually doing when you shop
When you visit an online retailer, book travel, or compare insurance quotes, AI systems are assessing your profile — your location, device type, time of day, browsing history, purchase history, and in some cases social media signals — and using that profile to determine what price to show you, what products to recommend, and in some cases whether to show you certain options at all. This personalisation is pervasive and largely invisible, and it can result in materially different experiences for different users viewing nominally the same product or service.
Dynamic pricing — where prices change based on demand signals, user characteristics, or competitive intelligence — is legal in Australia and is a normal feature of markets like airlines, hotels, and ride-sharing. The consumer protection issue arises when dynamic pricing is used in ways that are misleading: when the "original price" shown in a sale is not a genuine price, when the personalised price significantly exceeds the standard price without disclosure, or when pricing targets vulnerable consumers in ways that exploit their circumstances rather than reflect legitimate market factors.
Australian Consumer Law and AI pricing
The Australian Consumer Law prohibits misleading or deceptive conduct and makes specific provisions about pricing representations. AI-driven pricing practices can breach the ACL in several ways. False reference pricing — where AI pricing systems display inflated "was" prices to make discounts appear larger than they are — is a direct ACL breach. Personalised pricing without disclosure — where the price shown to you is significantly higher than the standard price because of your profile — may constitute misleading conduct about the nature of the pricing. And price gouging that targets vulnerable consumers — using AI to identify and charge more to consumers with limited alternatives — can breach consumer guarantees and unconscionable conduct provisions.
