DIGITAL LIFE

When the algorithm decides how much each of us is worth

Personalization can bring real benefits if used fairly and transparently, but when personalization stops serving the consumer and starts exploiting them, technological progress turns into digital discrimination, warns Paulo Fonseca(image above) in this opinion piece.

Digital personalization has become one of the hallmarks of the modern economy. It allows products, services, and communications to be adapted to each consumer's preferences, making their digital experience simpler, more relevant, and more efficient. But there is a boundary that cannot be crossed: the one that separates convenience from exploitation. When personalization stops serving the consumer and starts exploiting them, technological progress turns into digital discrimination.

The recent case of Delta Airlines, which generated controversy by being accused of adjusting airfares through its artificial intelligence systems that assessed how much each passenger would be willing to pay for their trip, is just one example of a hidden phenomenon that is becoming increasingly widespread, although many companies vehemently claim that they do not use any pricing models tailored to their customers' profiles. The truth is that prices, interfaces, and even the messages we receive are increasingly shaped by our digital footprint. And often, not even Hercule Poirot can figure out what's behind the personalization.

It's important to distinguish between different types of personalization. There's content personalization – which includes advertising and recommendations from online platforms. There's interface personalization – which changes how each user sees and interacts with websites and applications, influencing decisions and perceptions. And there's price personalization – the most sensitive and potentially most problematic – when the value of a product or service is determined not only by global demand, but also by the analysis of our personal data, from purchase history to our publications and searches, and even the type of device or location.

Personalization can bring real benefits if used fairly and transparently. It can simplify choices, enable relevant offers, facilitate discounts, and improve the relationship between companies and their customers. But there are serious risks when personalization becomes a weapon of discrimination. Personalization cannot be used to exploit our weaknesses or our level of need for a product or service. It cannot serve to extract the maximum amount someone is willing to pay, nor to conceal the real market price.

DECO (Portuguese Consumer Protection Association) has developed extensive work in this area. For this organization, price personalization based on behavioral data that generates discrimination is incompatible with the Charter of Fundamental Rights of the European Union itself. When the price that each person sees is different, and especially when that difference results from privileged information that companies collect about us, the balance in the market disappears. Each person becomes an isolated market, without reference or possible comparison.

Dynamic pricing is also an example of this. In theory, it should reflect overall demand – more demand, higher price; less demand, lower price. But in practice, it is no longer the number of people interested in a product that determines its price, but rather the digital profile of the person seeking it. The risk is clear: when my online behavior influences the price I am shown, the market ceases to be a space of competition and becomes a reflection of the citizen's digital vulnerability.

But what should the solution be? The path is not to reject personalization altogether, but to put it on the right track. Personalization can and should exist when you offer clear advantages, such as real discounts, helpful recommendations, and a more accessible experience. But it must have transparent and auditable limits. Companies should be required to demonstrate that their practices are fair, and personalization can only exist by choice and never by default.

The European Commission has a decisive role here. It is not enough to require companies to disclose that they practice personalized pricing – it is necessary to define red lines through a strong, European, and coherent institutional response that establishes the ethical and legal limits of personalization.

The challenge, as we have already said, will always be to balance innovation with protection. The fair price is the one that promotes trust, better products, and the right choices. It is not the one that depends on how much an algorithm thinks I can pay. The digital future cannot be a game where consumers pay the price of their own information. If we let algorithms decide how much each of us is worth, then we will cease to be free consumers and become perfect targets. And no progress justifies this.

*Paulo Fonseca is strategic and institutional relations advisor at DECO

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