Protect your privacy online—and see better prices doing it

The prices you see while shopping on the Web are aren't always the same as the deals displayed to your spouse, neighbors or co-workers.

But now, at least one technology company is helping customers see the unadulterated costs of their online purchases.

Inside view of the eBlocker device
Source: eBlocker

Christian Bennefeld made his fortune creating eTracker, a European analytics company that creates user profiles to help online companies target customers.

But when he realized how deep tracking could go — using your Web browsing history to determine health insurance rates and credit scores — he wanted to do something to "give back" to Internet users.

He co-founded eBlocker, a device that attaches to customers' Wi-Fi routers to mask their identity from online tracking software.

Here's how it works: eBlocker protects every device in your home by combining the power of an advertising blocker, an IP address rerouter and by protecting you from being identified by third-party trackers.

In other words, when you get online, you get a clean slate as if you've never used that device before. You can still use first-party cookies, like those that remember your passwords, but once you leave that website, you're anonymous again.

It's like a combination of encryption, Adblock Plus and Tor, a so-called onion router often associated with the "dark Web." But eBlocker avoids the hassle of installing all these on each device.

It's all part of an elaborate industry aimed at stopping a largely opaque phenomenon of online tracking: dynamic pricing.

Once called yield management, dynamic pricing is nothing new. Automated price changes are common among e-commerce providers and often benign, researchers have found.

Indeed, Victor Rosenman, CEO of Feedvisor, runs a dynamic pricing company that doesn't track customers at all. Instead, it helps small businesses who are highly rated online, like Amazon sellers, accrue small premiums for their superior customer service.

What is newer — and what companies like eBlocker hope to address — is the growing extent to which prices are personalized based on a profile created by tracking your Web habits.

The idea is pretty simple. Companies use software to track how customers behave on their site. If many companies use that same software as, say, Google Analytics, then the company can build a profile of your habits across many sites.

So you seem like a well-educated professional searching for luxury items on a high-end mobile device? Well, you might be willing to pay more than average for some items.

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But even controlling for price changes for issues like demand or technical delays, some retailers still display different prices from person to person, said Christo Wilson, an assistant professor at Northeastern University in the College of Computer and Information Science.

While some of the pricing changes are immaterial, Wilson said that the personal data the companies get from the purchases could be an end in itself, used to edge out the competition.

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"It appears to be about incentives," Wilson said. "If you're logged in you get discounts. This incentivizes the user to do something ... [because] it's easier to track you this way. Every company wants to be on the data bandwagon."

While there are many workarounds to being tracked online, none are perfect. Temporary solutions like private browsing modes and clearing cookies do little good, as new, smarter technology like "hashing" (not to be confused with hashtags) has largely replaced them, Bennefeld said.

Some price tracking software only works on specific websites, or products. Options like eBlocker protect you until you decide to make a purchase, but once you log in, you're still revealing personal information to first-party tracking, Wilson said.

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Cookies and IP addresses can still be linked back to you, even if you switch devices, Wilson said.

Some industries are easier to fool than others. Airlines, for instance, have a publicly available clearinghouse of tickets' "true" prices, called Sabre, Wilson said. And rental car agencies often sort search results into a matrix of very specific options and packages which would be difficult to personalize.

Still, there's research left to be done on how deep personalized price discrimination goes, Wilson said.

"They could infer that I'm a liberal and they might only send me news searches with New York Times and MSNBC. That's arguably bad for me, shielding me from opposing viewpoints. That's a specific example with unforeseen negative consequences," he said.

"Predictive policing, surge pricing, we don't know how those systems work, or what data is being used. That's potentially concerning. ... Marketplace effects are easy to quantify, but there are other more negative areas, moral and ethical."