Travel agencies ordered not to use people's data to manipulate prices
By Chen Xiaoshu
Our online data contain a great deal of information about our personal lives. Many online platforms are believed to be using this information to manipulate the prices we pay for the products and services we frequently use so that we end up paying more than others.
The Chinese government has said such activities must stop. With China's National Day Golden Week starting on October 1, the directive could not be more timely.
The pandemic is largely under control across the country, and millions of people will be capitalizing on the easing measures to get away for a few days.
Online bookings are the preferred choice, but it seems the more you use certain platforms, the more susceptible you are to higher prices.
"Some platforms have a huge mass of people's personal information, and use artificial intelligence algorithms to personalize prices for these people. Then price discrimination may occur," said Zhi Zhenfeng, a research fellow at the Institute of Law at the Chinese Academy of Social Sciences.
"It is likely a violation of consumer rights laws," Zhi said. "Although there are many laws protecting personal information, there is no specific law in this regard. This gives some fraudulent sellers the opportunity to personalize prices."
The government has identified this problem and has issued temporary regulations. They stipulate that online travel agencies should obtain the consent of users before collecting their personal information.
Users should know what's being recorded, why it's being recorded and how it will be used. Meanwhile, online travel agencies are told not to use people's information to personalize or bump-up prices.
"The new regulation could protect consumers' rights and interests by defining the responsibilities of the online travel agencies," said Zhi. "It will improve the environment of consumers to a certain extent."
However, the problem isn't exclusive to travel. It also happens when customers purchase goods online or even order food.
Once these platforms understand your preferences through big data, they can manipulate the price you have to pay.
So what can consumers do to avoid paying more?
"When consumers register on these online platforms, they should pay close attention to the information they're being asked for," Zhi said. "They should make sure what kind of authorization the platform would get. If the platform requires excessive information, for example, a lot of personal information, then consumers should file a complaint if they can't refuse."
Zhi also warned about the information that gets collected when companies give away gifts and discounts.
"It's better to refrain from small gains online, such as swiping a QR code or clicking an electronic gift," Zhi said. "Sometimes you are required to fill in some personal information, which is likely leaked to the third party."