How Owning This Smartphone Could Be Costing You More Online

You don’t need a degree in economics to know that prices are influenced by a myriad of factors. Supply and demand are just the beginning; seasonality, competition, and evolving customer reviews also play a part. Many companies engage in “dynamic pricing” strategies, utilizing increasingly sophisticated algorithms to analyze real-time browsing data. However, with the rise of artificial intelligence, dynamic pricing has taken a new turn. What many consumers may not realize is that the prices of items they purchase online can change depending on their device.

One notorious example involves battery life. A few years ago, Uber revealed that its app could track battery levels, and users with less than 10% battery were more likely to pay higher prices in urgent situations, although Uber denies using this data to set fares. Tests have shown slight price differences between a fully charged phone and one with low battery. More intriguingly, AI algorithms can even recognize the model of your phone and adjust prices accordingly.

The logic is straightforward: if you own an expensive device, like the latest iPhone, AI assumes you have a higher purchasing power. When you visit online stores, the algorithm may show you higher prices or prioritize more luxurious products for you. This tactic isn’t new. In 2012, the Wall Street Journal reported that the travel site Orbitz was charging Mac users up to 30% more per hotel night than PC users because the algorithm suggested pricier lodging options first.

In 2014, researchers at Northeastern University in the United States analyzed 16 retail websites and confirmed that many were adjusting prices based on whether the user was on an iOS or Android device, with smartphone users often seeing more expensive products than those on desktops. With the advent of AI, algorithms have only become more adept, capable of analyzing behaviors such as typing speed to infer how rushed—and potentially spendthrift—a user is.

Not all companies engage in these personalized pricing strategies, but many have the capability. While such price discrimination is legal as long as it doesn’t involve race, religion, gender, or other protected characteristics, the best defense might be unpredictability, confusing AI to the point it can’t predict your actions. Alternatively, you could dust off an old phone for future online shopping, potentially saving yourself from premium pricing.