The Price Is (Not) Right: Data Protection and Discrimination in the Age of Pricing Algorithms

Laura Drechsler, Juan Carlos Benito Sánchez

Abstract


In the age of the large-scale collection, aggregation, and analysis of personal data (‘Big Data’), merchants can generate complex profiles of consumers. Based on those profiles, algorithms can then try and match customers with the highest price they are willing to pay. But this entails the risk that pricing algorithms rely on certain personal characteristics of individuals that are protected under both data protection and anti-discrimination law. For instance, relying on the user’s ethnic origin to determine pricing may trigger the special protection foreseen for sensitive personal data and the prohibition of discrimination in access to goods and services. Focusing on European Union law, this article seeks to answer the following question: What protection do data protection law and anti-discrimination law provide for individuals against discriminatory pricing decisions taken by algorithms? Its originality resides in an analysis that combines the approaches of these two disciplines, presenting the commonalities, advantages from an integrated approach, and misalignments currently existing at the intersection of EU data protection and anti-discrimination law.

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