Staying private and anonymous online is in your best financial interests

We know advertisers love to track us online through avenues such as browser fingerprinting, tracking cookies, Bluetooth beacons, IP addresses, and other methods of de-anonymization. And that, in turn, gives them the ability to serve targeted products and services.

Research by professors at Northeastern University looks at things like price steering (the practice of displaying certain products vs. others) and price discrimination (customizing prices based on user intent).

Real-world events drove the research. In one case, popular retailer Staples tracked visitor locations and applied price discounts if it determined that there were competitor stores within a 20-mile radius. In another, travel website Orbitz showed Mac users pricier hotel options as compared to PC users.

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Both events point to a troubling practice: prices of certain products and services aren’t fixed, but depend on what retailers think you might be willing to pay. Hence, your physical location can work against you; if you attempt to purchase flights or book hotels from a wealthy neighborhood, you might be asked to cough up more cash than someone who logs on from a smaller town.

Personalization or prejudice?

Personalized recommendations are a staple in the ecommerce world. By analyzing users’ cookies and browsing habits, retailers can display products that are likelier to result in a quick sale.

For example, if you’ve recently been searching for “4K TVs,” it’s possible that you’re in the market for one. Hence, a generic search for “TVs” on Amazon will probably result in 4K-capable products displayed prominently at the top of the results.

If Amazon were to show you irrelevant results first and put its 4K models further down the page, there’s a high chance that you might get frustrated and close the tab. That’s the last thing online retailers want, so they argue that personalization delivers a bespoke ecommerce experience.

While price discrimination isn’t illegal per se and is a fairly common practice among offline retailers in the U.S., it does evoke several negative connotations and is a reminder of the murky world of ecommerce pricing.

Price comparisons via a scientific measurement infrastructure took place across 20 different ecommerce sites spread across retail, hotels, and car rentals. A total of 300 users from Amazon Mechanical Turk were enlisted for this purpose.

The eventual findings of the Northeastern University study were eye-opening. The researchers found that nearly 50% of sites were actively engaging in both price discrimination and price steering, with some sites altering results by “hundreds of dollars.” The price discrimination algorithms took into account factors such as the users’ operating system, browser, geolocation, browsing history, and more.

Basically, if two people tried to book the same flight, tried to rent the same car, or the same hotel with identical dates and checkout times, they would be served different prices based on several variables. So yes, not only your geographical location, but also your browsing history and frequency of searches would work against you.

How can you guard against such predatory behavior?

As a first step, you should always log on to the internet with a VPN. With a VPN, you can get an IP address from another part of the world, helping you access better prices and deals.

However, we sometimes forget to do so, and that’s okay. Pesky advertisers aren’t going away anytime soon, so we must stay one step ahead of them at all times. This excellent resource will prevent advertisers from tracking your data. In a nutshell, be sure to do the following things:

• Log out of your browser and delete your browser cookies after every session
• Turn off location sharing
• Turn off Bluetooth when not in use to avoid tracking by Bluetooth beacons
• Use the Tor browser whenever possible
• Exercise caution at all times