How location data is used to manipulate airfare and car rental prices

location data
Credit: coffeebeanworks / Pixabay

While the EU recently passed the GDPR into law to give users control of how their data is collected and used, the battle is unfortunately only half won.

According to a new (and shocking!) study by TheBestVPN, you could end up paying almost double (or more) the actual cost of a product or service you are interested in depending on where you are accessing the website offering the product from. This concept is known as dynamic pricing — in which businesses charge consumers more or less depending on their ability to pay. It is also known as price discrimination, and it could have far-reaching implications.

For example, price could be manipulated to favor or disfavor people based on race, religion, and other factors. It was the subject of an investigation by The Office of Economic Advisers under the Obama Administration.

The study by TheBestVPN found that retailers manipulate location data to charge people different rates for the same service based on their resident location.

For example, while people in the U.S. are charged $9.99 for an Apple Music subscription, this goes up to $13.33 per month if they are located in the UK — or down to a measly $1.75 per month for the same service when subscribing from India. When trying to book a round-trip United flight from Malaysia’s Kuala Lumpur International Airport to California’s Los Angeles International Airport, it could cost as little as $1,307.74 when booking from Poland and as much as $2,426 when booking from the United States — that’s a savings of $1,118.26 for booking the same trip simply because of where you appear to book the trip from.

flight savings based on location

Now, while businesses justify dynamic pricing (or price discrimination) using a lot of reasons — such as the fact that they could offer automatic discounts to students, veterans, or economic-disadvantaged people — the fact remains that it could also be used to discriminate against people based on who they are or views they hold. It could also be used to extort people because they are believed to have the ability to pay more. That definitely doesn’t sound good!

You can make sure that your location data isn’t used to manipulate the prices of your purchases by doing the following, though:

1. Disable third-party cookie tracking

Apparently, as many as 85 to 90 percent of people allow third-party cookies in their browser. This allows advertisers and retailers to target them based on their activities on other websites.

In other words, a retailer can decide to charge you more or less for a product or service if they notice a pattern of you visiting a certain type of website. A retailer can decide to charge you more, or even outright refuse to serve you (although this would be illegal) if your cookies reveal right- or left-leaning activities.

While this won’t put an end to all forms of price discrimination, disabling third-party cookies will make a big difference — yet very few people take advantage of this feature. If you don’t have third-party cookies disabled already, head over to your browser settings and disable third-party cookie tracking.

2. Try different browsers and devices

Researchers have also found that most major online retailers charge different prices for the same product depending on the device used to order the product — in a particular study, Home Depot was found to not only serve different products to desktop and mobile users, but mobile users were charged more (with Android users being charged an extra $0.41 on average compared to users of other devices).

So, there’s more to having extra devices and gadgets than being cool: it could actually save you costs on products or services. It might be worth trying to view the product page of the product you are interested in on another device, or in another browser, before making a purchase.

3. Clear your cookies or go incognito

You can also ensure you get more neutral results by clearing your cookies when trying to make a purchase on an e-commerce website. With the cookies gone, there isn’t much data available with which to adjust the price of the product or service you are interested in.

However, it isn’t realistic to always clear cookies simply because you want to make a purchase — sometimes, you are logged in to sites or platforms you don’t want to have to log in to again, or you have ongoing sessions you don’t want to terminate. In these instances, the solution is simple. Simple go incognito by using the Ctr + Shift + N keys (on Windows, Linux, and Chrome computers) or the ⌘ + Shift + N key on Mac computers.

4. Disable location tracking

Most devices and apps are pushing for location access, and this data is probably going to be used to adjust prices you get for products and services if you have it enabled. If you have it location tracking enabled on your devices, it might be a good idea to disable it.

5. Use a VPN or other location masking technique

Finally, with or without all of the above options, you can also use a VPN service to mask the location you’re accessing a website from. In fact, this option is preferable since you can use a VPN to pretend to be in another location in order to take advantage of cheaper offers available to only people in that location.

When booking a round-trip United flight from Malaysia’s Kuala Lumpur International Airport to California’s Los Angeles International Airport, for example, you can use a location masking technique to set your location to Poland, thus affording yourself the huge discount originally intended for Poles. This should be done with caution, though, as sometimes scaled-down services/products are offered to people in certain locations (hence the price reduction), so make sure you check that this is not the case before trying to use that location to get a better deal.

Conclusion

While you can’t stop marketers from evolving ways to use your data to get more money out of you, you can at least educate and protect yourself. With the above techniques, you should be able to control how your location data is used against you.

This post is part of our contributor series. The views expressed are the author's own and not necessarily shared by TNW.

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