Algorithmic Price Manipulation & Targeted Gouging | The Weekly Show with Jon Stewart

Well, let's go back to Walmart. Let's. talk about Sparky. >> Who is Sparky? >> Sparky is Walmart's bot. >> Oh, for God's They call him Sparky. >> His name is Sparky. His or her? I'm not. sure. >> By the way, do they pay Sparky enough or. is he also on public assistance even. though he's working at Walmart 24 hours. a day, 7 days a week? >> Um, we should fire up the app and and. ask Sparky. >> Sparky, are you eating enough? Do you. have food insecurity? Sparks. >> is everything okay?

>> Son of a. >> You know, if you again go back to the. earnings calls, you look at how Walmart. talks about Sparky, here's what you. find. Basket totals for customers using. Sparky are 35% higher than for customers. who aren't using Sparky. >> No, Sparky, you son of a What? Ladies and gentlemen, welcome to the. Weekly Show podcast. My name is John. Stewart. We are coming to you Wednesday, September 16th. Normally we tape on a a.

Tuesday. We had to tape on a Wednesday. because of the Emmys. I I flew out to. the Emmys. It was delightful. I got to. sit at a table with my friends John. Oliver and Jimmy Kimmel and Steven. Colbear and and Steven Colbear won. And. God bless. I would have liked to seen. Jimmy Kimmel win as well cuz I know that. many people could do it cuz I think he. deserves it as well. Uh, but thank god. Steven was able to get up and accept the. award because and the people at home. didn't see this, but just minutes. minutes. before the award was announced, there.

was a terrible accident where all four. of our beards got interlocked. And uh thank God for a resourceful seat. filler who was able to somehow unlock. the Rubik's cube that was uh the four. nent beards of Oliver, Colbear, Kimmel, and Stewart locked together and allow. Steven to rightfully get up and accept. his well-earned uh Emmy for best uh. variety. But that's that. I'm a little.

jet-lagged. Uh it was lovely to see my. friends, but uh it's going to be even. more lovely. segue. to talk to today's guest who is going to. save our economy from the exploitation. of our. overlords. She is uh one of my favorites. Let's. just get to her. Ladies and gentlemen, Lindseay Owens, president and CEO of the. Groundwork Collaborative and author of. Gouged, the end of a fair price and what.

that means for your wallet. We are joined on this momentous day in. economic history by our good friend. Lindsay Owens, president CEO of the. Groundwork Collaborative, author of. Gouged: The End of a Fair Price and What. That Means for Your Wallet. And Lindsay, so nice to see you. She is joining us on. the day that she found out that the. printer that the publisher has ran out. of toner.

Now she's they're they're shipping a. bunch of books where maybe the words are. on there, maybe the words are not on. there. Lindsay, what have you heard now? >> Yeah, I don't really know. Um, I'm going. to run this down after you and I um log. out of the podcast, but all the more. reason to listen uh to the pod because. it might be the only way to get the. material. >> Lindsay, thank you for thank you for. saying so. And we are going to get into. the book. And if uh for those of you who. enjoy uh the economic musings uh put.

into print form, it will in no way make. you throw the book four or five times. against the wall in utter rage, which is. what I did as I was reading it. >> It is a rage read for sure. Although we. we end on um you know a slightly happy. note, but it it's a rage read. It is a. posit what you can do about you know. first we could do it is uh 10:00 a.m. It. is Wednesday. Uh the Fed Do you know. what time the Fed is meeting today by. any chance or what time they're.

announcing their rate war is going to. announce rate hikes? >> Usually 2:00 I think. >> So we don't know if they're going to. raise the rates or or not raise the. rates. Do you think they're going to. raise the rates? >> I think they are. I think they're likely. to to move forward with an increase. I. think that's what the markets are. counting on. And I think, you know, look, inflation is still pretty hot. right now. And uh you know, that that's. what the Fed does, raise the rates. So, >> you know, we we've had this discussion. previously on on many that that the Fed.

is a blunt a blunt tool. And it seems. like whenever the economy finds itself. in a in a difficult place, whether it be. because there's a war in Iran or a war. in uh Ukraine or uh you know there's a. pandemic, uh they decide to raise the. rates to blunt inflation, but it doesn't. necessarily deal with why inflation is. higher. It just slows the economy and.

hurts workers bargaining power. Would. that would that be a fair assessment? >> Yeah, look, we've had um a lot of policy. induced inflation. Um the president has. started a trade war. Um he has um. imposed a huge number of tariffs on the. American economy. Um the Supreme Court. struck them down. He re-imposed them. He. also started a war in Iran that has had. pretty significant impacts on oil and.

gas prices that has filtered through. prices throughout the economy. And as a. result, um, inflation is up, prices are. up. And so, um, you know, one of the. best ways to bring inflation down and. and start getting it cooling again would. be to get out of the war in Iran. >> Wait, what? >> And would be to recalibrate the tariff. rates. Um but Trump isn't doing that and. so the Fed is in a position where they. have their one tool which is um raising.

rates and so I think they are expected. to raise rates this afternoon and um you. know that's going to be a problem for a. lot of folks in the country. So, the. idea is, if I may, and I'm just going. to, you know, put this in in layman. terms. Uh, the president of the United. States gets to up everything in the. world and drive prices up. And instead. of the president of the United States. paying a kind of political or personal. price for any of that sort of thing, we're going to take it out on workers. >> Yeah.

>> Well, if you put it that way, it makes. total sense. you know, we do have a a. political price that that will be likely. be paid um um you know, to the incumbent. party, right? Um there's a Republican. trifecta um in Congress. >> Oh, that is Oh, that is so optimistic. I. from your mouth to that that that's an. exciting prospect you've just laid out. there. it is, you know, it your book and.

and we're talking about uh gouged, the. end of a fair price and what that means. for your wallet. And it's written by. Lindseay Owens uh who is our favorite, if I may say. I don't want to say pure. favorite, one of our top five favorite. economists. Not only because I think uh I agree with. so much of of what you say, but because. you never sound you're you're very. pleasant. It's a um it's a tough field. Um there's.

a lot of arrogance, there's a lot of. ego. >> I love how we're dancing around all. these uh various things. You your book. though, you know, it it it goes into we. always think about supply and demand as. being there are sort of these immutable. laws of economics that drive what you. pay for things. And there's almost. nothing you can do about it. It's just. merely uh companies there's a demand for. their product. There's a certain cost of. making that product. They then give.

themselves a little a little bump on. their product, a little little bit of. profit and and that's how capitalism. works. Lindsay, from reading your book, it it seems like that may not be exactly. how things work. Yeah, there is a lot of economic theory. that depends upon a whole host of. factors. um that make a lot of sense in textbooks. but that don't actually appear in the.

real world and one of those factors is. competition for example. um you know. getting prices to a nice level depends. on competition and when there is not a. lot of competition we see um the. opportunity for companies to raise. prices well beyond what would be. expected in our models. Um we also see. frankly companies um you know getting. together and ensuring that prices aren't.

competitive. Um in the book I tell a. number of stories about cartels um and. price fixing. Um I talk about um a kind. of old school cartel um the Feebis. cartel. These were um the CEOs of the. major electric companies um across the. world from Japan to Europe to the US and. they met in December in Geneva, Switzerland and they said, "Hey um we're.

not selling enough light bulbs." Why. weren't they selling enough light bulbs? Because it turns out um the technology. um that keeps light bulbs burning has. been really good for a really long time. There is a light bulb today in Liverour, California that's been burning for over. a hundred years. And you can log on. Yes. Yes. >> Wait. Log on. It has its own webcam on. it. >> It has It has a webcam. It is a light. bulb cam. It's like a panda. >> Lindsay, where is this light bulb? It's.

in Liverour, California. >> Livermore, California. I haven't had a. chance to check it out. >> Is it in a a living room? Is it in Is it. in the foyer? What? What are we talking. about here? >> It's in like a fire hall in Liverour, California. I'm going to try to make it. out later this fall to take a peek at it. in person. Um, >> Lindsay, your life is better than that. I'm going to tell you this right now. You don't have to do that to yourself. We can all log on to it if we want to. see it. I don't want you uh to have to.

do that. Now, the Feebas story that. you're telling, and by the way, Feebis. with a PH, just to let you know how long. ago this was. This was when when was. this? Early 1900s. Yeah, it was um 1924 when the Feebis. cartel convened in in Geneva, Switzerland to um short circuit the. lifespan of the light bulb. They got. together. They said, "We're not selling. enough of these light bulbs. They're. lasting too long. We've got a problem.". Um and they all agreed to cut back on. the lifespan and wrote a wrote a memo,

signed it. Um there was a memorandum and. they even vetted and ensured compliance. um each of the participating companies. had to send their light bulbs to a lab. where the lab tech plugged them in, you. know, screwed them in and kept them. burning and then logged and monitored. how many hours they um burned to make. sure there were no cheaters because of. course um someone who's offering a. longer burning light bulb would have a. competitive advantage outside of the. cartel.

>> Yes. Yes, they would. And this ushered. in, and I don't know if officially. ushered it in, but it's sort of the. theory of of I guess what they call. planned obsolescence. >> Sure. Exactly. >> Where you would build things that you. could build better, but if you built. them better, you wouldn't be able to. sell as many because you'd have no. return customers. >> Yeah. You're degrading the quality of. the product um purposefully to sell more. of the product. It breaks early. Um, another form of planned obsolescence. would be if one of the parts um.

deteriorated earlier than the full part. So, the battery in a toy um you know. running out, but then you can't change. the battery. So, you've got to buy a new. toy rather than just sticking a new. battery in. Yeah. >> And to be clear, they can make it better so that you. wouldn't have to buy as many and they. have gotten together to choose not to. Yeah, that's exactly right. And I think. um the key here is coordination. Um to.

execute a successful cartel, a. successful price fixing scheme, you need. coordination. And coordination costs are. are significant. Um everyone had to fly. to Geneva and get in a room and and talk. it through and sign a deal. >> This is all presume. This is this is. this is presume where people could have. just done it from their computers. >> Yeah. And look, those um types of. cartels are still alive and well. I. mean, we saw examples recently of the. big tech CEOs sending each other emails.

and making sure they weren't hiring each. other's employees and engineers because. they wanted to keep wages down. Um, we. had an example in California recently. where the attorney general exposed a. kind of old-fashioned price fixing. scheme between Amazon and Walmart and. retailers like Levis's where they were. emailing each other and saying, "Hey, it. looks like the price on the Levis's. website is a little better than the. price on the Amazon website. Like, let's. take care of that, right? Like, let's. get the prices back up." Um, but in the. book I'm really focused on the ways in.

which new technologies have allowed tech. companies to sort of supercharge these. age-old impulses and reinvent the. ripoff. And these days um you can get. price fixing across industries and. sectors where coordination would be. impossible but for the players using a. common algorithm. >> Let me let me roll this back. So in the. old days, they would fly to Geneva and. they would sit in a room and they would.

say, "Our product is lasting too long. Let's all make the product shittier. >> so we can sell more of them.". >> Was that at that time illegal? Is is. collusion amongst competitors? Has it. been typically illegal? >> Yeah, collusion and price fixing is. illegal. Um and the um you know the case. I just mentioned against Amazon um is. being brought by the attorney general of. California. Um it is illegal um to price.

fix. It is illegal to collude. >> Okay. So and and the way that they would. track that down is I'm assuming it would. be different government agencies would. regulate this kind of collusion. And. typically that would be the Federal. Trade Comm. Who who would who would. typically be in charge of of figuring. that out? >> Yeah, the Department of Justice has an. antitrust division and they can. prosecute companies at the federal. level. they can prosecute companies for. price fixing and collusion.

>> and the tax on companies to comply with. that because I assume it's you kind of. think of it as just another uh cost. compliance that there's a tax if they. were to get caught is enough of a. deterrent. that generally that has not that people. have not colluded other than there's the. famous case you use uh in in the book I. guess it's not collusion uh well no you. know what we'll get into like uh price. gouging based on surging and things like. that later. >> Yeah. >> Uh let's keep talking about collusion.

So generally the price of colluding. would make people think twice about it. Is that would that be fair to say? >> I mean ideally yes like litigation risk. um would be something that would keep. companies from flouting the law. Um but. clearly um you know many companies in in. the US and elsewhere have made a. decision that flouting the law is more. profitable than complying with the law.

and they don't view the compliance costs. and the potential for getting caught as. as fatal. I think they probably feel. like they'll get a slap on the wrist. I. think they feel like they can tie up. those legal proceedings um for a long. time. maybe they feel they can fight. them effectively. You know, in the case. of the algorithmic price fixing I talk. about in the book, um you know, a lot of. these companies argue that they're just. suggesting the prices and therefore. um you know, they aren't technically.

involved in price fixing, right? They're. just the algorithm offering prices. It's. the retailers that are taking the prices. and setting the prices. >> Well, this this is where it gets really. interesting. So in the old days it was, you know, you would think of guys in a. smoke filled room talking about, let's. make our light bulb shittier, we can. spend more. >> Yeah. >> These algorithms are involved. everything that makes it so that when. you're talking to your wife about lamps. and then you open your phone and. suddenly every other ad on Instagram is.

about lamps. the way that they drive those ads, the. way that they target you for those. things, they're also targeting price. They're targeting what you can pay. Is. that correct? >> Yeah. So, look, um, for a long time, prices were posted, they were on. stickers. They were pretty. straightforward. >> You worked at the limited. I worked at, uh, uh, Orman's. So, I I I worked as a.

stock boy there. And we did. We had a. little gun and you would go around. >> Yeah. >> And you would just hit the prices on on. the thing and that's how it was. determined. >> Yeah. There was some stability like in, you know, in America we've had price. tags for 150 years. You know, we didn't. always have price tags. Um, you know, haggling was the norm for thousands of. years. >> I was shocked to find that out from the. book that haggling was the norm in. America up until, you know, 1800s.

>> Yeah. Late 1800s. It was it was the. Quakers who said, "Look, it's pretty. unfair to charge different people. different prices for the same item. All. men are created equal under God. We. should have a fixed price. It shouldn't. depend on. >> I can't believe they're using the all. men are created equal under God to be. like this should only be 59 cents. Everyone should pay that.". >> I love that. >> I mean, look, price discrimination. discrimination is inherently unequal,

right? >> And I think it didn't sit right with. them. Um, you know, this idea that you. might charge someone who you didn't like. a little more if I had some dirt on you, I could probably get a better deal, right? Um, it felt unfair, but also. eventually we got the price tag because. there was a business case for it, right? So, John Womaker is usually credited. with um the first price tag in the US in. his Womakers department store in. Philadelphia in the late 1800s. And he. is supposedly um was supposedly inspired.

by the Quakers. He was a devout. Presbyterian and religious man, but also. he wanted you to buy a lot of stuff in. his department store and haggling for. each item took a long time. And so, posting the price. >> um got you in and out of the store more. quickly. So there was, you know, there. was a business reason to um to use a. price tag. But look, 150 years we had. price tags. You got the Sunday weekly in. the newspaper and you could see the. price of all the groceries that week.

What is the price of a pound of meat. going to be? What is the price of a. gallon of milk going to be? And you. could compare prices across grocery. stores. And when you went to the grocery. store, you know, with your weekly, you. knew that the price in the grocery store. would match the price in the weekly, right? Um, and if if it didn't, for some. reason, an error, they would, you know, they would match it for you, right? It. was pretty straightforward. And today, pricing isn't like that. It is a highly. engineered science. There are teams of.

pricing consultants and pricing. adviserss. In the book, I talk about. them as a sort of cross between the Geek. Squad sort of physics nerds and Seal. Team Six, right? They are assassins. >> Let be fair, price assassins. >> Price assassins. >> They're not literal assassins. >> They're they're trained in the art of. wallet emptying, right? I mean, they are. really. >> Sale Team Six of Bankruptcies for. consumers. And also in the old days, let's be fair, to change the price was.

laborious, you know, and and it would be. uh not something that you could do on on. a whim. It would be. >> yeah, >> relatively in infrequent, but now it's a. second to second, microcond to microcond affair. >> It's dizzying. Um, you know, in addition. to the lack of transparency in not. having, you know, clear set posted. posted prices, um, it also makes pricing. way more volatile and unpredictable. You.

know, if you go on TikTok right now, John, there will be, um, dozens of. >> You know, you know, I'm going to, Lindsay, I'm I'm actually on it right. now. I'm just scrolling. >> Just multitasking. >> Yep. >> Um, you'll find dozens of videos of. women and some men. um taking pictures. and snapshots of prices changing right. before their eyes or you know in Walmart. being like hey the price you know was. supposed to be this and now I'm at the. checkout line and the price is three. times what I expected or look I'm in.

Walmart and I'm in the clothing section. and they haven't even bothered to put. price tags on the clothes anymore. they're just you know um brand labels. right everything has has shifted under. our feet as pricing has gone higher. attack. >> Hello. It's It's time for your favorite thing, which is advertisements.

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UK, too. That's quce.com/tws. I mean the best example I I can give you. Yeah. >> is the fact that it has become. commonplace for companies to run. experiments, pricing experiments on. millions of Americans while they shop. There are AI companies. Eversight is a. good example. This is an AI company um.

whose sole purpose was to set up a. system a platform to run pricing. experiments without people's knowledge. Now, a pricing experiment, just to to. give people a sense of a a pricing. experiment is, and stores have have. always done this to some extent, but. obviously in a more analog way, is. pushing to see how much you can get. somebody to pay for a certain item and. testing those upper limits. >> Generally, the floor as well.

>> Absolutely. um testing our willingness. to pay, our price sensitivity, what the. sort of peak price we might be able to. um you know still um take an item at. without closing our shopping cart. online, but running tests at a scale. that's unimaginable, right? Um you know, behind the scenes doing AB testing, offering you and I different prices for. the same item to start to get a better. sense of exactly how much they can. charge. And to be clear, the thing.

that's different about this is they now. have your data. So this isn't these are. not blind experiments. These are. experiments where they understand you. may have just lost your job or you may. have just gotten a raise or you may have. two kids or three kids that that and. it's near Christmas and they know you. need this more and they're using your. life. against you. >> Yeah. So we have a few different types. of technologies here. We have just.

simple experimentation. Um you know. which is I think pretty deceptive if you. and I don't realize we are subjects in. this grand experiment to determine which. of us will pay more um you know for. bread and how much we'll pay for milk. And that's what Instacart was doing on. on millions of Americans shopping for. their groceries last year. >> The Instacart one is is fascinating. talk about that because our. understanding of these online uh sort of. marketplaces is that they exist to save.

us money that they are crunching the. numbers to the point where they're. getting us that we're used to expedia. we're used to kayak these the idea is. we'll find you the best price we'll use. our technology to help you as a shopper. this is the opposite. >> yeah so my organization teamed up with. Consumer Reports and More Perfect Union. late last year to run an experiment that. exposed Instacart's experiment. Um, we.

got volunteer secret shoppers together. and we said, "Look, log on to Instacart, select a pickup location in Seattle or. Washington DC, buy the same 23 items, buy the same groceries, like buy a. partyized bag of Tostitos, buy a. >> box of Frosted Flakes, >> Oh yeah, Lindsay, talk to me. Yeah, I. like to do. >> it was a good basket of groceries. Um, for sure. >> Um, and then we said, "Look, take. screenshots of your cart." That was the.

whole experiment. Um, it was pretty. straightforward. Then we crunched the. numbers and that's when I think um, things got pretty interesting. What we. found is that for 75% of the items in. that grocery cart, different subjects in. our experiment were being offered. different prices from Instacart. These. were at the same pickup locations in the. same cities at the exact same time. Everyone was logged on together. >> Make that clear. That that's the clear. thing because you might want to say to. yourself, well, geez, it's cost of.

living is more expensive in New Jersey. than it might be in. This is not oh. across platforms, across cities, across. various things. This is the same item in. the same store at the same time. >> Yep. Exactly. >> Different price. The equivalent would be. if you and I, John, were standing in the. exact same grocery line. Yeah. And we. just happen to have the exact same. basket of groceries. I check out and am. charged $123. And while I'm still bagging my. groceries, you get rung up and your.

price is $155. Um, that's what we found, right? Um 75%. of the items were offered at different. prices at the same time and the price. differences were pretty extreme in some. cases. Um up to 23% more for some. shoppers than other shoppers. An average. of 7% diff differences across the whole. basket um of grocery items. And of. course, if you were on the losing end of.

that AB test, you were getting offered. the higher prices. Um, you know, we. estimated for a household of four, because of course you don't buy one. grocery item or one basket of groceries. You go grocery shopping every week all. damn year, right? You've got to eat. It's tw, you know, $1,200 is what we. estimated it could cost a household of. four under some conditions. >> And they're not just pushing this. randomly. They're not just trying to. see, oh, if I inch that up there, they. also know who you are. >> So, in the Instacart study, we did not.

find uh personalized or surveillance. pricing. um we couldn't pin the price. but yes. so so what's happening next companies. are getting better um at not just. running these randomized AB tests at. scale thanks to larger computing power. um and e-commerce which is you know a. place where it's easier to hide these. experiments they are also starting to. track your data um the breadcrumb trail.

that you leave online what you click on. what you look at, what you hover over. with your mouse, but don't click on. >> Oh, dear God. >> Yeah. >> Oh, dear God, I've got some clean up on. aisle three to do. >> Yeah, it is really scary to think about. the types of information they have. They. know if you're logged on from a Mac or a. PC. They know if you're logged on from. Manhattan or Nashville. Um, all of these. things can be used. >> They know if you owe money. They know if. you're in debt. They know if you got a.

raise. Yeah. And increasingly um you. know, not to get too dystopian, increasingly they know what you confess. We are on the precipice of agentic. commerce, which means if you're talking. to your chatbot about how you're feeling. a little insecure about um how you look. ahead of the prom and you're a high. schooler, >> um you know, in a world in which we. start to see agentic commerce take off. And by the way, McKenzie says that's.

going to be a $5 trillion book of. business by 2030, which is only a few. years from now. Um, you can easily. picture a world in which what you said. to the chatbot could be very useful in. deciding how much you'll pay for. something, how desperate are you, how. urgently do you need something, what. kind of person are you, um, and how. could we use that in our price setting. decisions? And I I can't stress this. enough is that and we are sold the.

fiction. that online marketplaces exist to find. you the best deals. This is the part. where it gets really pernicious as well. And I know there are sites that say we. search for you and we find you the best. thing. But what they never tell you is. they're working 10 times as hard to. exploit you. >> Yeah. than they are to help you. Is that correct? >> Let me give you two answers to this. Uh.

let's go with the companies. Answer. number one, Delta partnered with an. intelligence company, an artificial. intelligence company out of Israel. called Fetcher. Um they partnered with. Fetcher to get better at pricing, to get. better at dynamic pricing, to get better. at charging you the maximum price for. every seat on a Delta plane before you. started peing at American or Southwest. But they also talked about Fetcher on. their investor day calls as a company. that could help Delta um you know start. to achieve personalization, right? Figure out what each individual might be.

willing to pay for every seat on a Delta. flight. If you looked up Fetcher um at. the time, which we did um before they. deleted everything from their website, we pulled down their white papers and. their blog posts. What you found in. Fetcher's white paper were their. marketing materials and explaining this. to companies like why do why would you. buy Fetcher's product? There were two. phases. Phase number one was the. exploration phase. This is where Fetcher. started looking around your customer.

base, looking around your competitors, just trying to understand the market, trying to sort of test what people would. pay. The second phase was called the. exploitation phase. Um, this was not. subtle. >> Was called the exploitation phase. It's. in the white paper. >> They didn't even come up with a a a a. pseudonym. They didn't come up with. something that could have presented it. in a more gent they were just literally. this is where you would exploit these. people. >> Yeah. Like our AI has rooted around your.

marketplace, learned everything it can. learn, right? >> Like gotten a good sense of who your. customers are, and now we're going for. broke, right? Now we're going to exploit. what we learned um to drive revenues up. Um, so that's how these companies talk. about what they're up to. And then of. course Delta CEO Crowing um in his. earnings calls about how great the. partnership with Fetcher is going, how. much money they're bringing in, the. revenue outlook. Um, you know, they. started with a little pilot program.

where they gave Fetcher 1% of their. routes. They said by the end of the year. we're going to give them 20%. We love. what we see. Like we love the. exploitation phase, right? >> By the way, Lindsay, God bless the. earnings call. If it weren't for. earnings call, you would think that the. these CEOs say on CNBC or any. of these other places is actually real. Like during the pandemic, you would. think that during the pandemic when they. said, "We're really struggling to get,

you know, uh, the types of products to. consumers even though we have real. supply chain issues and that's what's. driving the price up." And then they go. to the earnings call and go, "We're. killing it, folks. This pandemic has. been unbelievable for us in terms of. profit. This is about maximizing profit. That has nothing to do with really. supply and demand. It's it's. exploitation. >> Yeah. I mean, God bless the earnings. call is right. Um we learn a lot about.

what companies are actually up to from. earnings calls. Um look, telling. consumers that you are doing this is a. terrible business strategy. Um, >> hey guys, you're in the exploitation. phase of our app. >> Yeah. Like when we exposed what Delta. was up to, which I mean didn't take a. lot of work. Like they said it in broad. daylight on their earnings call, you. know, there was a huge PR crisis for. Delta and of course the CEOs of American. and Southwest really seized on that and.

said, "We're not going to do that." And. Delta had to back down. >> What happened when when Instacart, cuz I. thought this was interesting. when you. exposed Instacart, I thought their. reaction to that was very telling. >> Yeah. So, initially, um, they denied. almost everything in our study. Um, they. did say that they run a select set of of. pricing experiments and AB tests and. tried to sort of, you know, brush it. under the rug, but they said, you know, we're not doing traditional dynamic. pricing, like we're not changing the. price based on the weather or like.

supply. We're not doing surveillance. pricing. We're not setting prices based. on individual features or. characteristics of you. This isn't. personalized. It's just AB testing. And. there was a PR malstrm for the company. Um, their stock plummeted. The Trump. administration announced a probe of. Instacart, which you know, the FTC under. the Trump administration had done like. nothing. So, this sort of woke them from. their slumber briefly. >> And two weeks later, the company cried. uncle and posted a blog a couple days. before Christmas and said, "We're going. to we're going to stop these.

experiments. we're not going to let. grocerers partner with Eversight, the AI. company who ran the experiments anymore. Um, but throughout history, the way in. which um companies have sort of found. out when they had gone too far and when. they stepped over the line and when they. touched the stove was often um consumer. outrage. And the example that I that I. use in the book that I love is in the. '9s, the CEO of Coke was down in Brazil.

giving an interview to a magazine. I. don't really know what he was doing down. there, but he let slip in that. interview, probably thinking like, "No. one's reading this Brazilian magazine. that Ko was piloting installing. thermometers in their vending machines.". >> Yes. It's a great story in the book. >> to charge you more on a hot day for a. Coke. Right. Right. >> Um and this was before, you know, this. is like 1996, right? So this is not. things are not going viral on X. Uh but. it was on the cover of, you know, major.

American newspapers coast to coast. Wall. Street Journal blasted him. It was in. the Honolulu newspaper, right? Um and. Pepsi, of course, weighed in. You know, we're in the business of quenching. thirst, not exploiting it. Um and Coke. backed off and said, "You know what? We. just kidding. Like, you know, the lab is. closed. We're not going to be installing. thermometers on vending machines, >> right? >> So, >> you know, I do think, you know, bringing. sunlight to these issues and frankly. what a lot of consumers are doing when.

they're taking these Tik Toks of what's. happening in Walmart is actually part of. how we get this work started, right? It's how we let companies know that um. these practices are approaching a point. at which they're no longer okay. They're. no longer fair. They violate our values. and our norms as a society and in this. economy and we don't want to see them. anymore. >> You've you you've heard me talk about. fast growing trees, right? You know how.

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You do some really interesting, I think, kind of public opinion polling about. what consumers think is fair or unfair. And I do think consumers generally. accept some measure of cost pass through. as being the price of doing business and. being fair. And they're very clear about. when that crosses the line. When is it. that consumers feel like, "All right, I. see what this costs you. I see there's a.

little bit of, you know, you've got a. pad in for profit and paying your. workers and all these labor costs and. everything else, but this is too far. >> Yeah. There's like a really interesting. series of studies in the 80s and '9s um. from behavioral economists that started. to test this. You know, they they did. phone surveys and they called people and. they gave them a pricing scenario and. they said, "Do you think this is fair or. do you think this is unfair?" And they. tested some things that I think are just. as resonant today as as you know you.

could have imagined. So things like okay. tariffs are going to be applied to a new. item peanut butter. Like the cost of. peanut butter is going to go up because. of tariffs. Is it okay for the. shopkeeper to raise the price of the. peanut butter that's already on the. shelf so hasn't been exposed to the new. tariffs? Right. Because purchased and. shipped over before the new tariffs um. were put in place. And you know, 80. plus% of respondents say no, that's. unfair, right? He's taking advantage of.

the fact that um people are starting to. expect peanut butter tariffs even though. he didn't actually have to pay more for. that peanut butter. We should get it at. the original pre-tariff price. Um. another example, there's one Cabbage. Patch doll left in the store. I mean, again, this was in the 80s. Um. >> yes, >> you know, I had a. >> the Cabbage Patch Doll auction. I. believe this is referred to as the. Stanford Cabbage Patch auction. Experiment. >> Exactly. Exactly. But you know there's. one left in the store. Yeah. >> How do you decide who gets it? Is it the.

first person to the aisle? Like that's. first come first serve or a queue. Do. you say, "Okay, there's 50 people in the. store. Everyone draw a straw. It's a. lottery and whoever gets lucky gets the. Cabbage Patch doll." Or do you say, "Oh, this is interesting. I've got a lot of. people in my store. I've only got one. cabbage patch doll. Let's sell it to the. highest bidder. >> Right? >> If you talk to a lot of economists, they. love the idea of selling it to the. highest bidder. >> Sure. Supply and demand it. What could.

be fairer? >> What could be a better way to evaluate. who needs the Cabbage Patch doll the. most than figuring out who's willing to. pay the most? >> Yes. >> Right. >> I want it so bad, John. I'm willing to. pay $100 for it. That's a perfect. outcome. Yes, >> but economists love an auction. Americans trust a line and I think we. saw that this summer with FIFA. >> and the auction is unfair and for. millennials or for for newer uh viewers. substitute labu.

>> Yeah, exactly. >> And I think you'll have your. understanding. But where this comes into. play in sort of wrapping it back around. to the Fed and raising interest rates. and these things, we're generally told. that inflation is a product of supply. chain problems or you know uh wars or. disruptions or all these different. things. But there is a level of price. increase that is utterly artificial.

that has much more to do with market. concentration and collusion and uh these. AI tricks. And yet. there is not, you know, raising a an. interest rate is going to do nothing. to touch those drivers of consumer pain. Yeah. And those two things are related, >> right? >> So the cover that these economic events,

global events provide is an additional. opportunity to raise prices. >> Explain that. Explain that. >> Yeah. So okay, the best example is Tom. Barkin. He is the chair of the Richmond. Federal Reserve. Right after Liberation Day, when Trump. imposed his sweeping set of tariffs, he. holds um a little round table with local. CEOs and business people in Chapel Hill, North Carolina. And he asks them, "Hey. guys, um you know, liberation day has.

happened. All these tariffs are are. here. Are you raising your prices. because of the tariffs or are you. raising the prices, his words, because. of the tariff noise?" the opportunity. the tariffs provide you to raise your. prices. >> And one of the business owners in the. round table says, "Actually, it's both.". And I'm I feel guilty admitting that. Um, of course, not, you know, not guilty. enough to stop, right? But these.

external economic events um put upward. pressure on prices. They do, right? Tariffs are going to pass through to. consumers. companies pass those through, >> but they additionally provide. opportunity to go further and the fog. that companies need um to go further. because again consumers don't like it. when they find out they're being built. or nickel and dimed or overcharged. And. so having um consumers a little confused. like am I paying more because of the.

trade war or is this company just. picking my pocket, right? And I don't. know. And that's a good place for. companies to be if the goal is to. overcharge you, for you to not be quite. sure if you're being nickel and dimed or. if this price is just responsive to. external events. Well, the pandemic was. the San Francisco level fog event of of. the century for these companies because.

the the world is sort of shut down and. in a standill and nobody's getting. anything. And in that emergency, God bless the earnings calls because. corporations were talking about we've. never done. better. And that seems an impossibility. unless you are manipulating. because if it if you weren't taking. advantage of a situation,

the idea that in a a worldwide. catastrophe. they would be able to maximize their. profits. is unconscionable. unless they're manipulating. You know, the impetus for this book started in. part because we started studying at my. organization how companies were. responding to inflation. Like, you know, how were they thinking about this? Were. they like, "Oh like we're going to. be in real trouble. This is going to eat.

into our margins." Or did they feel like. they were going to weather the storm? And what we saw over and over again was. CEOs telling their investors, "Actually, a little bit of inflation is good for. business. Actually, my team is doing a. great job taking additional pricing, passing all of this pricing through. >> additional pricing. and God bless. euphemisms, >> price optimization, revenue management, yield, all of these terms that companies.

are hiding behind when um you know. really what's happening here with price. optimization is they're calibrating. exactly how much they can get away with. charging you. I will say the other data. source that we have been using lately um. in addition to the earnings call um that. we've become obsessed with is the. patent. You know, companies swear up and. down that they're not building the. technologies to get better at. overcharging us in the grocery aisle. Um. that that's not what they're focused on,

>> but they're utilizing it. They're not. building it. They're just utilizing it. >> Yeah. And when we look at their patent. applications, the patents they file, the. patents they're granted, what we see is. companies who are investing a ton of. money in building new technologies for. things like surveillance pricing um over. and over. The best example, um you know, Walmart's patents are a really scary. place to look um the types of things. they're exploring. So, one of the.

patents that they were granted um is for. smart cards, right? Smart carts are. starting to become more common in. grocery stores, right? You, you know, you put your items in the cart and you. can go ahead and scan them right there. in the cart so you don't have to deal. with checkout. Um, but of course that. allows companies to start doing some. personalization, right? Because now that. thing where you and I were online and. not standing next to each other in the. grocery store, so we didn't realize we. were being charged different amounts for. the milk. they can sort of approximate.

that in the grocery store because you. and I aren't checking out next to each. other anymore because we're checking out. in our carts. >> in real time, right? And one of the. patents and this is the example that. they give is um as the um technology. gets better at understanding what you're. interested in buying in part based on. what you are buying in that moment um it. can change the price of other items that. it thinks you will need to complement. those items.

>> Holy So, if you buy something that. generally like I've got sloppy joe that. I've just put in my cart, they know. you're going to need buns. And so, buns. on your way to that aisle, they will. charge you more for the bun cuz they. know a bunless sloppy joe is just. chipped beef in your hand. >> Yeah, exactly. The example in the. Walmart patent is tuna and mayonnaise. Once you've got the tuna,

>> the price of mayonnaise should adjust, right? Because you're probably making. tuna salad. >> That's a st. So, so the the the larger. point of all this is to to try and give. it a more macro view. A lot of the. crises that we face are in part, I'm not. saying in total, but in part caused not. by the crisis, but by the opportunity. that these companies see in the crisis.

And if if I may, I'll use an example. that you used in the book. So, we have a. housing affordability crisis in this. country. People have a very difficult. time finding rents, uh uh buying houses, those kinds of things. you talk about in. the book there is a company uh that. surveys I guess it's called real page. and it artificially increases people's. rents not based on what the market is. suggesting but by these these algorithms.

that you're talking about is is that is. that still in use is that true. >> yeah so at the end of the Biden. administration um Jonathan Caner who was. the head of the antitrust division. brought an algorithmic price fixing case. against real page. >> and say what real page is and and what. it does. >> Yeah, so real page is a real estate tech. company. It is Texas-based. Um it used. to be publicly traded. Now it's. privately owned. Um but it is a software. platform that landlords use to do a.

whole host of things. Um but one of the. things that it can be used for is. pricing. um recommending different. prices for landlords. It's primarily. used in the commercial market. So, your. kind of mom and pop landlord is probably. not using it, but the guy who owns a. building with 30 units probably is. Um. and what it has allowed landlords to do. is coordinate on pricing in ways that. would have been impossible without. software.

>> Um because there are collude and too. many landlords. Yeah, that that was the. allegation, right? that they were. colluding using this shared common. algorithm, this shared software. >> Um, but if you read the Department of. Justice's complaint against Real Page, >> um, you know, it's maybe a 100 pages, which I did, one of the really. interesting things you learn is all of. the ways in which the algorithm was. designed to kind of um, obliterate how supply and demand should.

work in the rental market, right? So. when there was um a glut of apartments, there was a lot of availability, you. know, prices should come down, but real. page didn't recommend dropping the. price. They said, look, um it would be. better to have a couple of vacant units. um and charge more to keep prices high. and to keep prices moving in our. preferred direction, which is up. Um, there was a whole host of asymmetry.

baked into the real page algorithm. So, there were hard floors, didn't want you. to go below certain prices, but there. were soft ceilings. >> The ceiling is a mere suggestion. Please, by all means, if you think you. could charge more, um, we would hate to. be in your way. >> I believe the sky's is the limit if I if. I remember the saying correctly. >> Exactly. you know, and by the way, it. wasn't just the algorithm because of. course, you know, some landlords might. say, "Look, I got to get this thing. rented, so I'm going to go for a lower.

price." They also had, you know, a team. of pricing adviserss on staff who would. um, you know, cajul and arm twist and. make sure landlords were um, sticking. with the recommended prices, charging. top dollar. So, this is all what is. alleged in the Department of Justice's. complaint. They held user groups for. landlords where they could get together. and, you know, and moan about the. pandemic and what it was doing to. prices, but also where they could. compare notes, right? Um, you know, the.

the kind of room in Geneva, Switzerland, right, approach, >> right? And agree to uh not undercut, not. go below that hard floor. >> Yeah, absolutely. And some analysts have. tried to estimate the impact of real. page in rental markets and have. suggested that um you know price. increases in markets where there was a. high penetration of you know landlords. using this software you know could have. been 25% more than they should have been.

right. >> pretty huge increase. >> I mean it's it's really stunning. Mint Mobile I don't know what you want. out of a phone company. What I want out. of a phone company is deliver me a good. product for less and don't bother me. Don't bother me with the like, oh, have you heard about our new program? You can upgrade to it. It'll just cost. you a lot more and then they like call.

you a bunch on their own phone. Think. about that. Think about the diabolical. mind games that phone companies are. playing by like locking you into an. expensive phone program and then using. the very item that they sold you to. contact you about paying more for some. ridiculous upgrade that's not even. really an upgrade. Oh, they're. diabolical but not MMO. Mint Mobile plan. 15 bucks a month. 15 bucks a month. What.

is it? 1992. 15 bucks a month. Highspeed data, unlimited talk and text delivered on the. nation's largest 5G network. To get your. new wireless plan for just 15 bucks a. month, go to mintmobile.com/tws. That's mintmobile.com/tws. Cut your wireless bill to 15 bucks a. month at mintmobile.com/tws. That's it. There's no catch. I mean that's the thing about this book. is what you're uncovering is absolutely.

stunning because what it suggests is the. story that we are all being told about. affordability is not the whole story. So. the remedies that we are also being sold. about the affordability issues are not. adequate because we're all being gamed. And by the way, combine that with here's. another area that I think we haven't. really talked about. When you talk about consolidation of.

industries, when you talk about four or. five companies owning 80% of all the. meat packing in the United States, well. then suddenly the ability of these. algorithms uh and these uh collusions. becomes uh you know supercharged. and makes it that much more difficult. for us to address it. Look, it is really. hard for me to overcharge you if you can. walk across the street uh and get a.

better deal, >> right? >> So, concentration and winnowing. competition in the American economy um. is part of the precondition for a lot of. what we're seeing right now. But I do. think, you know, the big innovation and. algorithmic price fixing is it allows. for coordination even in markets that. might have competition, right? um right. the court, you know, the multif family. landlords, right? Right. >> Um or I'll give you a more recent. example that um you know just came out.

after I I finished the book. There is a. law firm that brought a class action. lawsuit against a tech company called. Calibrate in California, which is. basically the real page of gas stations. And what is alleged. >> Wow. >> Yeah. But what is alleged is that 1,700. retail gas stations were using calibrate. um potentially again you know again this. is an allegation to um you know help set. retail gas prices in 1700 gas stations.

Right. Like you couldn't coordinate. across all 1700 of you. Right. Right. Um. and the complaint alleges that the. increase um in gas prices as a result of. calibrate could be as much as 30 cents a. gallon. Um, I mean that is an. extraordinary. >> um, complaint and you know there's. always been this question of like why. gas prices are so high in California and. there you know there are reasons related. to like differential reg regulation and.

and environmental standards but it's. always been even higher than that still. and you start to wonder if maybe we're. um honing in on the answer and the. answer is um anti-competitive practices. like algorithmic price fixing you know. alleged by this this tech company. calibrate in in gas and retail. So just. um you know there I mean there by the. way there's one of these for French. fries called Potato Track. >> Come on. >> There's one for hotels called Rain. Maker. I mean. >> there's a French fry cartel.

>> Frozen French fries. It's it's called. Potato Track. >> Bastards. >> Yeah. What's really sort of difficult to. wrap your head around with all of this. is anytime the government is going to. involve itself in trying to address. these affordability issues across. different commodities or different. services or different things. We are. always told that socialism that's anti-. capitalistic. It can never work. Price. controls are uh the road to hell. we.

can't possibly stop this because what. you're seeing in prices is merely the. natural effects of supply and demand. And what you learn is that story is. It's utter nonsense. And yet. what seems to be a very fixed point in. that is that government trying to. intervene is somehow socialism. Yet corporate collusion is considered oh.

that's the price of free market. How do. we address that narrative? >> Yeah look the idea that um you know. pricing is competitive falling from the. sky um you know that really falls apart. um when faced with the data in my book. Um but also more broadly the ways in. which we know companies are are gaming. markets are obscuring pricing in ways. that would make it impossible for. comparison shopping to function. By the. way, how how the markets um achieve.

competitive pricing? It is through the. mechanism of the bargain shopper doing. her comparison shopping, right? >> Going to one store and saying, "hm, that. price seems a little high to me. I'm. going to hold and see if I can find a. better deal." getting in her car, going, you know, three miles to the next. grocery store, seeing the better price. Um, and then a bunch of people do that. and the grocery store on the north side. says, "Hm, nobody's in the store today.

I wonder what's going on. Oh, the. grocery store on the south side is. offering better deals. I've got to lower. my prices." That is the mechanism. through which pricing is disciplined in. markets and pricing can be um, you know, can can be competitive. um when you. can't comparison shop um because you. have no idea what the prices are or. because the prices are changing before. your very eyes or because companies have. used personalized pricing to figure out. who the comparison shoppers are and. offer them a good enough deal to keep.

them at bay. >> Oh dear god. >> And then overcharge all the rest of us. You know, pricing cannot be competitive. in that environment. >> So where then is is the federal. government? Where is the the FTC? Where. is the SEC? Where are any of these. organizations that could help? Because. what they do is they leave you then to. uh the harsh winds of the Federal. Reserve. What they do is they don't. address any of these. Inflation starts.

to rise. Suddenly you get interest rate. hikes and suddenly there's a recession. and people lose their jobs and it's all. an artifice based on these com and I'm. not saying totally I'm not saying that. there aren't supply shortages and. housing and there aren't real issues in. eggs and beef and all these other. industries but it is clearly exacerbated. by these non uncompetitive issues that. companies are producing.

>> Look, um we do not have the um the. funding or frankly the bigger problem is. the political will for the enforcement. we need to make um this economy. competitive and fair and honest for the. American people. And that is a problem. that is bigger than the one that we're. discussing here. And this is a pretty. big problem. That problem is, I think, the problem of our democracy. um. corporate capture of this government um.

which makes it easy for companies to say. you know what this is a risk I'm willing. to take I don't think I'll be I don't. think this will be enforced and if it is. I think it'll be a slap on the wrist or. a fine that I can absorb as the cost of. doing business and until we have a. functioning democracy um it is going to. be hard to ensure that our economy is. working for consumers and workers as. well. But Lindsay, I I don't even really. hear economic populists talking about.

this as a huge issue. You know, I. definitely there are a lot of people. talking about the affordability crisis, which by the way is a phrase I. hate. Affordability crisis. It's not a. crisis. It's the natural occurrence of a. system designed. to squeeze you by raising prices to the. point where it will break you. This. isn't a crisis because the system isn't.

functioning properly. It's a problem. because the system is functioning as it. was designed. >> Yeah. Companies being on the precipice. of figuring out how like how to charge. us the absolute maximum we are willing. to pay for every single item in our. grocery cart. um is horrifying and maybe. only surpassed by the thought of um you. know Agentic Commerce taking a run at. this exact same um opportunity. >> Yes. Yes.

Let tease that out a little bit because. that's it's just what I was thinking a. little bit earlier when we were talking. about if AI can you know your. bottom line it can unfuck it. And so how. is it that consumers can get how can we. develop AI tools that can alert the. consumer of when this manipulation is. occurring because there's no question. that that is within the realm of. possibility.

>> Yeah. I mean here I think we actually do. have a kind of interesting opportunity. because most people are not doing their. shopping using bots, right? um most. people are not doing all of their shop, you know, sending Gemini out to take. care of their week's worth of shopping, right? And so, >> no, but even those websites are. designed, Amazon designs its website, and you actually talk about this in the. book, the sort of casinoization of these. websites where, you know, going through. the website leads you to higher prices, leads you to not get uh good deals.

>> Absolutely. um you know, dark patterns. These are the design techniques that um. you know, engineers have built into. e-commerce to make it hard for us to get. out of there without spending more than. we plan to. Putting us into a. subscription when we just wanted one. item instead of one item every month for. the rest of our lives. Um giving us a. personalized storefront so we don't. realize we're not on the main website. and now we're having prices catered to. us. But um I think there is a question.

which is who will these agents work for. in the commerce setting. Um you know. you're right um these agents could be. deployed to help us accomplish something. that has become more difficult which is. comparison shopping. >> Hey Chat DBT like go get me a summary of. every price for this particular sweater. that I want. Um you know it returns that. information and then I go buy the lowest. priced item. That is possible, right?

That is one pathway. >> and can help you uncover dark patterns. and can help you uncover. There's no. question that you could create a gentics. that would allow people to see how. they're being manipulated. >> Absolutely. Absolutely. Can uncover some. of these tricks and traps. They can do. hard work um for us. Give us some. shortcuts. Um, you know, like chat GPT. is probably going to be better than the. points guy, right, at figuring out some. of this stuff, like.

no offense to the points guy who was. who's really great at um helping. everyone with their airfare. But, you. know, we are getting to this place where. we sort of, you know, start to wonder, >> you know, amidst all of these just. incredibly opaque and manipulative. pricing practices if we're going to need. a points guy for milk and a points guy. for bread and a points guy, you know, for for everything that we. So sure, Agenta Commerce has I think a. lot of possibility in that in that vein. But the flip side is um you know these.

agents may not work for us, they may not. work on our behalfs. Um they may work. for the highest bidder, whoever they get. kickbacks for. Um Gemini partnering with. retailers who um you know preferentially. um send us certain. >> Oh my god, even AI is greedy. Hey, I I. thought, well, it shouldn't have human. impulses. It should it should be working. for the the moral good. Where's Azimoff.

when we need him? For God's sakes. >> I mean, look, um, let's talk about Let's. go back to Walmart. Let's talk about. Sparky. >> Who's Sparky? >> Sparky is Walmart's bot. >> Oh, for God's They call him Sparky. >> His name is Sparky. His or her, I'm not. sure. By the way, do they pay Sparky. enough or is he also on public. assistance even though he's working at. Walmart 24 hours a day, 7 days a week? >> Um, we should fire up the app and and. ask Sparky. >> Sparky, are you eating enough? Do you.

have food insecurity? Sparky, >> is everything okay? >> Yeah, son of a. >> Um, you know, if you again go back to. the earnings calls, you look at how. Walmart talks about Sparky, here's what. you find. Basket totals for customers. using Sparky are 35% higher than for. customers who aren't using Sparky. >> No, Sparky, you son of a What? >> I mean, look, like there could be. innocent reasons for this, right? Maybe.

the types of people who are using. >> Okay, the types of people who use Sparky. relative to the types of people who. don't use Sparky are wealthier and we're. going to be more likely to buy more at. Walmart anyways. But I think what is. more likely. >> is um and they talk about this a little. bit in the earnings call. >> If they're wealthier, they're at Target. They're not at Walmart anyway. >> Yeah. Sparky is good at upselling. Sparky is good at closing, making sure. you don't forget to check out and you. buy everything in your cart. Sparky is.

good um at bundling. Hey, you bought the. tuna, you should definitely get the. mayonnaise, right? >> Oh my god. So the ways in which. companies are deploying enterprise. agents like Sparky, Amazon has Rufus, there are a lot of different um agents. um that these companies are are working. with. I think does present new frontiers. for um for gouging and new frontiers for. overcharging. But also Sparky will ask.

you an innocent question like what do. you need today and when do you need it? And you know it knows you need something. urgently. It knows you need it knows. you're in a rush. I think, you know, when we talk about personalized pricing, we often think it lines up with income. Like these companies are just going to. charge the people with the most money. more. And that's and and like maybe some. people are excited by that. Oh yeah, they're going to bulk the wealthy. But I. think, you know, your desire for. something doesn't always match income. Sometimes you're desperate for something.

because. >> it's the middle of the night and you. have a sick kid or you don't have a sick. kid, but your kid's yelling in your ear. to buy something, right? you you need it. now. You're going to a funeral, so. you're buying a plane ticket. Um, you. know, all of those. >> But the point is that almost entirely. every one of these tools. is an avenue of exploitation. >> Yes. >> Not an avenue of convenience even or of. uh what you would consider to be supply.

and demand. It's exploitation. >> and extraction. Yes, that's a better. word. Thank you. Extraction. That's what. it is. >> You're going for all of the consumer. surplus, like every ounceum of. additional money you're willing to fix. the damage of extraction. The only tool we have is to create. collateral damage for people that are. already suffering, which is to slow the. economy, slow hiring, depress wages.

It's that same argument I got into with. uh Mr. Summers. where he was discussing uh how it's why. shouldn't they be able to charge. whatever they could possibly get. Well, because that seems to be uh sparking. inflation and then you're going to spark. a recession by raising rates and people. are going to be out of work. Look, I I. think um you know there there is another. avenue here um in addition to the. enforcement avenue and it's a.

legislative one um and we are seeing. some. >> green shoots um you know I don't want to. get too optimistic but we're seeing some. green shoots. So this year alone there. have been 90 pieces of legislation to. tackle algorithmic pricing. Um, several. states have actually passed legislation. um to tackle algorithmic pricing and. things like surveillance pricing. >> Can states effectively do that given. that the algorithm is not a resident?

The algorithm unfortunately does not. live in Fresno. Yeah, the um you know. the first piece of legislation that was. passed um in the country was actually. disclosure law in New York um that. requires companies operating in New York. to tell you if a company is setting. prices using algorithms. You know, while. mere disclosure is not enough, um it has. been useful in shining a light on which. companies are using this. Right? If you. go to Door Dash, you're going to get the.

warning. If you go to Uber, you're going. to get the warning. Um, this is how we. found out that Washington Post was doing. sort of personalized pricing on its. >> um, subscribers, >> but they're owned by Jeff Bezos. I can't. imagine he would deploy those types of. techniques, >> right? Like he only founded the most. sophisticated. pricing company in the history of. mankind, Amazon, right? Yay. >> Um, but you know, that disclosure was. sort of a helpful first first step and. and now folks are trying to ban these.

practices like you can't use my data to. overcharge me, right? >> You can offer discounts, but not in um. not by spying on me by like giving me a. senior discount or a student discount or. a Memorial Day sale or or a coupon, right, that everyone has access to. Um, so, you know, there there is starting to. be some momentum at the state level. Um. there you know there's some interest in. this at the federal level. The Federal. Trade Commission um you know issued a. notice and comment so you know for the.

next nine days you can you know let the. Federal Trade Commission know what you. think about this and what you think they. should do about it. Um so I'm I'm. optimistic that um you know in the. relatively near future we'll see some. some real meaningful action on this. Um. but right now it's a wild west. >> That's what I like to hear. Yeah, it's a. wild west, but Lindsay, your your book, uh, if I may, uh, exposes this in such a. clear and, uh, well researched and well.

presented. I mean, it it paints a really. complete picture of all the headwinds. that people are facing in terms of. affordability and why it's not a crisis, but it is the end result of very. obviously exploitative and extractive. policies. So, uh, I really appreciate. it. Uh, the book is called Gouged: The. End of a Fair Price and and what that. means for your wallet. And man, oh man,

you should get it because you should. understand. what these people are doing. Uh, Lindseay Owens, president of CEO. Groundwork Collaborative and uh, author. of this great new book, Gouch. Lindsay, thank you. >> Thanks so much for having me, John. It. was really great to chat and so. appreciate you reading the book and. giving me the chance to discuss. >> Uh I didn't read it. Uh Gemini gave me a. summary and I was just working off of. that. So I didn't uh my agent my agentic. was No, it was I read it. It was great.

Uh thank you though, Lindsay. >> Thanks for having me. >> Work. sucks. That's why they call it work. And I got. to tell you something about work. The. biggest pain in the ass with work is. when you got to see you got to stop. trying to do everything yourself. You. know what I'm talking about. Delegate. You don't have to do it all yourself. Well, you little control freaks are in for a.

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You know, I said God bless the earnings. call, but along with that, let me say this. God bless the cross country one-day trip. to the Emmys because I got to sit in. quiet and read her book twice. Once on. the way out. >> Yeah, that's some silver lining. >> Right. And so I felt uh incredibly able. to be present. >> Yeah. Good book, too. A good read.

>> It's really good. It's shocking to me. that Lindsay, you know, that she's. considered like the radical. She's a. socialist. you like. trying to protect people from. exploitation. >> She's like, "They're charging you 35. cents more for eggs, you guys." Like, >> they're all like, "Shut up, Marks. Let. me tell you something, Angles. You don't know what's going on. Uh I I. but when you start to think about it. when you guys shop on like I'll go on. Amazon.

I never realize like they bury on the. pages the best result for what you want. >> and they try to sell you crap. Yeah. >> Or when it'll say like guest pick or. like uh popular choice or all those. labels. >> Amazon choice. >> Amazon choice. Right. And you're like, "Yeah, but who the f like who?" Jeff. Bezos. >> He has my best interest in mind. >> He's literally going through like you. need this snorkel. This is the snorkel.

you need. Uh but that that the discussion about. dark patterns. It struck me as as a. former big fan of casinos. >> Yeah, that was I mean I loved that when. she's talking about like sort of maze to. get out of a casino. I've had that. experience like in Las Vegas. I look. something up and I'm like, "Oh, it's a. 10-minute walk and it takes me like 30. minutes just to get out of the. building.". >> And that's what they're doing to us, you. know, on every website now. You want to. cancel your subscription, you want to. find the best deal for yourself, you're.

going to have to navigate through all of. these pages. >> Well, it's interesting how much of their. economic theory seems to come from. casinos, cuz casinos are designed at. every turn to get you out of your room. your room is uncomfortable. spare. You know, there's always the kind. of and I don't know if this is. apocryphal, but they put in pumped air. and they keep it drier and they keep it. >> wow. >> less pleasant so it'll drive you down to.

the floor of the hotel where the casino. is. And once you walk into the casino, you're in Jumanji. >> It's the best. >> Like you're not getting out of there. until you defeat the final boss. >> Free drinks. free drinks. You can still. smoke. >> Yeah. Learn Amazon, >> right? >> Having that experience on Amazon.com. >> How many times have you been in the. casino and you can't find your way out? And when you finally do, you're like, is. it daytime? >> You're like, is it 95 degrees?

>> What the hell? How did this happen? >> But listening to this conversation and. after reading the book, like, what is. Congress doing? >> Uh, so Mitch McConnell has. >> he's got a plan for that. He's got a. bill. Um he's just got to work on. obviously regaining the use of his hands. and feet. and then he's gonna they're not doing I. mean she said there's 90 pieces of. legislation but. >> yeah but but it's the tip of the iceberg. really because this is like it's a.

symptom and it's not you know the actual. problem. And I think I mean the most. disturbing part about this for me is. just like. >> these crises they're always like they're. twofold. They raised the prices twofold. because now they have a crisis and. you're going to get hit for that. We're. not saying that the Iran war isn't real. The tariff war isn't real. These things. aren't hitting your wallet. >> They have the opportunity. >> But then they create that pretext to. also gain raise prices on top of that. and increase their bottom line. And by. the way, they're also squeezing the. other side, the workers, at the same.

time using the same practices to hurt. them. That's right. >> And that's the larger problem. And you. don't see anybody really trying to. address that. No, but that's what we we need to start. I think the economic incentives have to. be readressed and adjusted. And that. doesn't mean, you know, the workers must. own the means of production. But what it. means is that you have to rebalance the. economy so that it doesn't always flow. into the favor of these extraction. processes. It has to somehow rebalance.

to the betterment for, you know, the. consumers and the people. But that's now. we're up on our our platform. But guys, we are getting $5,000 checks. >> Oh, yeah. You know, it's a good point. And it won't, as Besson said, it he. doesn't see why it would affect the. deficit. It's only $1.3 trillion. >> There are ways to do it. Tell me about. these ways. >> Okay, here's a way. What if we just. don't count it? >> Okay, >> how about that? Throw that in there. Britney, what do. the people want to know? For God's.

sakes. >> Okay, John. >> Yeah, hit me. Hit me. >> Trump lies. What? >> Period. >> Britney, prepare me for these shocks. >> Do you think the White House press corps. should just ignore him instead of. running after him like Natalie Harp? >> I do. I actually think that he only he. needs them more than they need him. That. the access to Trump is nothing because. the system has been designed to his. advantage. You can't ask follow-ups. You.

can't do anything. It's just designed. for his own personal performance. So it. really serves no purpose in terms of. public value. It's just another platform. for him to spew. And the reason why they. like it is it's a content factory. It. continues to generate content for all. the other shows that exist and all the. other aggregators. But as far as. transparency, it's not transparency. It's uh as my friend Mr. Bill O'Reilly. would say, a petty fog machine. It's.

petty foggery and it's all nonsense and. it would deny him the thing that he. craves the most which is to be the. center of the universe to be the consent. the the center of the concentric. circles. >> Yeah. I mean when Carolyn Levit. announced she was leaving um there was a. reporter that I saw online that was an a. New York Times reporter. He said, you. know, say what you will about her and we.

have, but she always answered our the. questions that I sent. >> Jesus. >> And I was really like, that's where. we're at. Just. >> ignoring the fact that she stood up. there and lied to the American public. for an hour every day. >> Say what you will. >> Say what you will about Caroline Levitt, but she lied consistently. You know, a lot of people would have. just started to cry, but she didn't. She stood tall and lied to us with a.

straight face for hours. >> A lot of people would have said, "Fuck. you." But she didn't say that. She just. implied that. >> Say what you will about Caroline Levit, but she did insult us to our faces and. also our intelligence when it came to. the answers that she ordained to answer. >> Yeah. Say what you will. That's. Stockholm syndrome. That's just Yeah, that's capture. >> Yes, >> for sure. Oh, for goodness sakes, Britney. What else they got?

>> Uh, John, do you believe the Supreme. Court is truly just calling balls and. strikes? >> I think they would be so much better for. this country if they were actually. baseball umpires. >> No, the umps. If the Supreme Court. actually just dealt with baseball and. balls and strikes, I'm talking about not. getting involved in any of the they have. single-handedly. made it impossible for us to reform and. save our democracy. decision after.

decision after decision by the Supreme. Court has left us unarmed in the face of. a fullfrontal assault on democratic. principle. Citizens United, the way that. they have redefined corruption as it has. to be explicit quidd proquo. The way. that they have made it explicit about. that, the way that they have made it. that corporations are people and money.

is speech and and they always say the. same thing in those decisions like I'm. sure it'll be fine because transparency. will be a great counterpart to all of. those things. But there's never any. transparency. There isn't any actual. It's just dark money group sending it to. a pack or sending it to another thing. You don't know where it's coming from. You don't know any of it. And it's. impossible to reform because now the. executive branch has near total immunity. and corruption doesn't actually exist.

The Supreme Court has done more damage. to unfortunately. Do you know what I. think it's going to force us to do? I. truly mean this. There has to be a. process of amending the Constitution. >> Wow. This idea that Citizens United. stands as the law of the land is the. biggest bunch of The Constitution. isn't a suicide pack and money is. killing this country. Money in elections. is killing this country. And most people. agree both sides like I think it's one. thing that everybody agrees on except.

for you know the Supreme Court and. >> but also and and they sometimes they'll. say things like and the legislature. could pass different sorts of limits and. all those sorts of things but why would. they pass something that would put their. own you know who will really be able to. handle our elections? The people that. rely on them for their incumbency. >> Mhm. and the people that have access to. more money because they are incumbents, >> right? Any reasonable system would make those.

individuals recuse themselves. >> from fixing a system that only benefits. them. >> through incumbency. >> Yeah. The unelected judges are supposed. to be the ones deciding these things in. favor of what is best for the American. people. But now that they've been. captured ideologically, the Roberts has. been the worst thing to happen in this. country in a long, long time. It's the. way that they've made it so that. agencies are no longer have the ability.

to regulate anything. They've made. everything in this country subject to. ideological capture and financial. corruption. Everything. >> So they lied in their confirmation. hearings. >> It's a joke. No, but John. But John, they're impartial because they struck. down the tariffs. Don't forget about. that. >> Here's what I say to them. Bo. All right. I'm fired up today. I. apologize. >> I love it. I know. It's great.

>> It's jet lag. >> Famously fires people up. Yeah. >> Um, okay. Last but not least. >> Yes, >> John. This is very important. >> Come on. Make it lighter, please. God. Yeah. I can't take anymore. >> Is it too soon to start decorating for. Halloween? >> What day is it? >> September 16th. >> Now, you generally have a one month rule. on on holidays and Halloween fits in. perfectly because it always occurs at.

the end of the month. So, I believe. October 1st is the starting line. I do. think jumping in on September and. especially given the fact that Halloween. decorations have become like look, you. want to throw a black cat decal on the. window and a little plastic orange. pumpkin with maybe a little spiderweb to. give yourself but at this point. it is the production value of Nolan's. the Odyssey. The that I see in our.

neighborhood of. >> where they're getting 28 feet tall. skeletons. I do not know. >> Costco. >> There are blocks my dog won't walk on. during October because of all of the. sort of scare tactics that try to jump. out at you. >> You see what you're doing? You see what. you're do? You're once you get to the. point where the animals have had enough. of you. I have a friend that has um she actually.

leaves it up all year round, but a huge. life-sized cutout of Michael Myers in. her window. >> Why would you do that to people? >> It's great. That's. >> It's so good. >> By the way, my least favorite YouTube. videos are the Michael Myers shows up at. Acme. like people that dress up like a serial. ruthless. >> Yeah. inhuman killer and surprise you by. the ice cream.

>> in the freezer section and everybody. laughs like, "Ah, these people think. they're about to die.". >> Yeah, we don't need that in September, you guys. >> Thank you. October 1st is plenty of. time. Although I do understand at a. certain point when you're spending. $30,000. on Halloween decorations, you probably. want to get them up as early as. possible. >> That's a fair point. That's a fair. point. >> My dollar store already has uh Christmas. decorations being sold. So, we are way.

ahead of it. Guys, >> do they still do those stores that are. purely. Halloween stores? >> Spirit Halloween. >> Spirit Halloween. What do they do? They. take over empty spaces. >> for a certain time. It's like a pop I. guess what you would consider a popup. >> Seasonal. Yeah. >> And are they in play already? Are they. >> I saw one going up. I watched as the. sign rose. >> I love I love the idea. That's like. pardon pardon our appearance. We're. trying to make Halloween as pleasant as.

possible. All right. I'm excited. Do you still do. you do Halloween ritual? Now that my. kids are out of the house, like it's a. non-issue in my house. Halloween. >> I think last year Jillian and I actually. just sat on my stoop and drank and. passed out candy. >> Some of these kids were too old. >> Yes, they were all too old. It was like. we were getting. by these high schoolers. I love the idea. of you two sitting on a stoop doing.

basically the Joan Rivers. e red carpet show on people coming by to. come to your house. >> Oh, it's too accurate. >> on there. You call that a ghost? >> We're going to start charging this year. >> That's hilarious. I love it. Uh well, very very lovely. Uh as always, by the. way, next week we're we're coming out on. Wednesday again, right? >> Yep. We're back. Yeah, that's the big. change. How can they stay in touch with. us? >> Uh Twitter, we are Weekly Show,

Instagram threads, Tik Tok, Blue Sky. We. are Weekly Show Podcast. And you can. like, subscribe, and comment on our. YouTube channel, The Weekly Show with. John Stewart. >> As always, thanks to you guys. Producer. Britney Mmedic, producer Jillian Spear, video editor and engineer Rob Vatollo, audio editor and engineer Nicole Boyce, our associate producer Rebecca Roenberg, and our executive producers Chris McCain. and Katie. Great. Thank you guys so much. for doing it, and we'll see you all next. week. Boy, The Weekly Show with John Stewart is a. Comedy Central podcast that's produced. by Paramount Audio and Bust Boy.

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