Here is the wikipedia article on the theoretical basis: https://en.wikipedia.org/wiki/Price_discrimination https://en.wikipedia.org/wiki/Price_discrimination M

Here is the wikipedia article on the theoretical basis: https://en.wikipedia.org/wiki/Price_discrimination https://en.wikipedia.org/wiki/Price_discrimination Many forms of price discrimination, like menu pricing or 2-part tariffs, as well as group pricing, are used every day. This, however, is an attempt at first-order price discrimination enabled by near-perfect tracking of users. It is then unclear to what degree this may or not be illegal, or will be in the future. Important to keep in mind is that it "hurts" the consumers in the sense they can no longer get a theoretical surplus. Therefore consumers would have to change their mindset about purchasing things. Goods would have to be bought more with a mindset of filling "necessities", because on average we, the consumers, would lose surplus compared to firms. So naturally, this has the potential to piss off consumers, either if they have the intuition, or understand what price discrimination does. Edit: As for the legality, I can give the following advice. First, be very careful about how you classify consumers, because many group-based discriminations (such as gender) that are implicitly used by ML algorithms, are definitly illegal. Second, price discrimination in the "normal world" often points to having monopoly power. Currently, there is no good eqivalent for the internet world, because many monopoly tests fail by default (for example, entry). That is why I believe the EU or the US will eventually legislate against this form of personalized pricing to protect consumers. It is a grey zone now because, for example, the EU legislates that illegality necessitates a) a monopolistic position and b) using it to hurt consumer surplus or block competition. For internet companies, with some big platforms being the exception, the test for a) fails by default. This differs from country to country, but because the algorithms can only infer purchasing power based on characteristica, I believe that they will be made illegal (in the EU) based on the respective constitutional laws that make discrimination based on these properties illegal, and I do not think monopolistic postitions will be necessary. That means even a small internet start-up should be careful.