U.S. Sen. Richard Blumenthal (D-CT) spoke out against Delta Airlines after it announced plans to use artificial intelligence to set individualized airfares.
Based on consumer data, the company plans to set specific prices for certain individuals. Delta plans to expand the use of AI to determine prices based on personal information potentially obtained through various third-party channels.
Blumenthal said he is concerned about how the prices are determined and where the information is sourced. Blumenthal said he disagrees with the company's decision to charge target fares instead of fixed rates. He believes it could lead to unfair increases.
“That is profoundly dangerous. It means they can discriminate based on where you live, how much they think you make in income, what your wealth is, your past purchase history, all kinds of factors that enable them to discriminate," Blumenthal said.
The company announced it would use AI to determine prices for 20% of its ticket fares by the end of the year. The AI model predicts the number of people who are “willing to pay for the premium products related to the base fares."
In a letter to Delta Airlines CEO Ed Bastian, Blumenthal demands more transparency from the company. He is concerned about the potential threat it poses to consumer privacy because the information collected could be misused or breached.
“Prices could be dictated not by supply and demand, but by individual need. While Delta has stated that the airline will ‘maintain strict safeguards to ensure compliance with federal law,’ your company has not shared what those safeguards are or how you plan to protect American families against pricing discrimination in the evolving AI landscape,” Blumenthal said.
The letter was cosigned by U.S. Senators Ruben Gallego (D-AZ) and Mark Warner (D-VA). It outlines their questions about the data sources being used to train the AI system. Blumenthal said he wants to ensure that the company complies with and will follow all related federal and state laws.
Last year, the U.S. Senate Permanent Subcommittee on Investigations (PSI) investigated several airlines and released a report revealing how major airlines used ancillary fees to boost their revenue. Blumenthal served as Chair of that subcommittee and questioned the company about customers’ negative experiences.
