FISA Section 702 Expires: A Win for Privacy as California Targets Surveillance Pricing
Featured image: Photo by Efe Burak Baydar on Pexels.
The landscape of digital privacy has seen significant shifts, marked by both the expiration of a controversial federal surveillance authority and proactive legislative efforts at the state level. In a notable development for civil liberties advocates, Section 702 of the Foreign Intelligence Surveillance Act (FISA), a program that allowed broad government surveillance, recently expired. Concurrently, California is taking a leading role in safeguarding consumer rights by advancing a bill aimed at banning “surveillance pricing,” a practice where companies use personal data to customize prices. These two distinct but related events underscore a growing public and legislative appetite for greater transparency and accountability in how personal information is collected, used, and protected.
The Expiration of FISA Section 702
Section 702 of the Foreign Intelligence Surveillance Act has long been a point of contention for privacy advocates. This authority permits U.S. intelligence agencies to collect communications from foreign nationals located abroad without a warrant. However, a critical issue has been its expansive nature, which routinely results in the incidental collection of digital communications—including emails, messages, and calls—belonging to Americans [1]. The authority for this far-reaching surveillance program officially expired on Friday, June 12th, 2026, at midnight, marking a temporary victory for those concerned about government overreach.
For decades, organizations like the EFF have consistently argued that Section 702 requires a warrant before the Federal Bureau of Investigation (FBI) can access digital communications collected from Americans. Without such a safeguard, they contend, the program should not be renewed. The recent expiration, even if temporary, represents a moment where this long-standing demand has been met, at least in the short term. The path to this expiration was paved by months of congressional deliberation, with lawmakers repeatedly postponing a longer reauthorization in hopes of reaching a consensus on necessary reforms [1].
A Temporary Reprieve and the Call for Reform
The recent lapse of Section 702 was influenced by a unique set of circumstances, including a controversial appointment to a key intelligence position that led to significant bipartisan pushback. This political dynamic prevented both the Senate and the House from approving even a short-term renewal of the program. While the immediate cause may have been specific political concerns, the underlying issue of potential abuse of this program is not limited to any single individual or administration. The broad collection of sensitive American information through Section 702 has consistently raised alarms across the political spectrum [1].
Many members of Congress, from both sides of the aisle, recognize the inherent risks. There is a palpable and growing desire for stronger transparency, accountability, and oversight mechanisms within the structure of the program. Privacy advocates hope that this temporary expiration will galvanize Congress to enact meaningful reforms, particularly a warrant requirement for any backdoor searches of Americans’ data. Until such safeguards are firmly in place, the authority for this program should remain expired, ensuring that the privacy rights of U.S. citizens are not inadvertently compromised under the guise of foreign intelligence gathering [1].
California’s Stance Against Data Exploitation
While federal surveillance programs grapple with oversight, states are also stepping up to address privacy concerns in the commercial sector. California, often at the forefront of consumer protection legislation, is now targeting a pervasive and often invisible form of data exploitation: surveillance pricing. This practice, where corporations leverage extensive personal data to offer the same product at different prices to different individuals, represents another critical battlefront in the fight for digital rights. It highlights how the relentless harvesting and monetization of personal information can directly impact consumers’ wallets and perpetuate societal inequities.
Understanding Surveillance Pricing
Surveillance pricing is a sophisticated form of price discrimination, enabled by the vast quantities of personal data that corporations collect. This data can include an individual’s browsing history, physical location, and shopping transaction records. Companies utilize this information, often sourced from their own operations, third-party surveillance pricing service providers, or data brokers, to sort customers into various groups. These groups are then presented with customized prices for identical goods or services, much like how targeted advertisements are delivered. The rationale behind the price differentiation can be based on factors as granular as whether a customer is a new parent or their proximity to a competitor’s store [2].
The Federal Trade Commission (FTC) has previously shed light on these practices, noting that retailers frequently use personal information—ranging from location and demographics to even mouse movements on a webpage—to set targeted prices. Unfortunately, public comment portals for surveillance pricing have been closed at the federal level, but the California Attorney General has initiated its own investigation, indicating the growing seriousness of this issue [2].
Real-World Examples of Price Discrimination
The impact of surveillance pricing is not theoretical; numerous studies and investigations have revealed its discriminatory effects. For instance, The Princeton Review was found to offer higher prices for test prep services to people residing in certain zip codes, leading to Asian individuals being twice as likely to be quoted a higher price than non-Asians. Ride-sharing giants Uber and Lyft, in a year-long study in Chicago, charged higher prices for trips ending in neighborhoods with significant non-white populations. Dating applications like Tinder offered older users (aged 30-49) higher prices for premium services compared to younger users (18-29) [2].
Other examples include Orbitz charging Apple computer users more for hotel rooms, hotel booking sites offering San Francisco residents higher prices, Target increasing prices for customers physically located in the store, and Staples charging more to customers living further from its competitors. These instances illustrate how deeply ingrained and varied surveillance pricing has become, often leveraging demographic, geographic, and behavioral data to maximize profits at the expense of fairness and transparency [2].
Why Surveillance Pricing is a Problem
The practice of surveillance pricing is detrimental on multiple fronts. First and foremost, it constitutes a profound invasion of privacy. Companies determine prices only after meticulously scrutinizing an individual’s online clicks and offline movements. This incentivizes all businesses to harvest as much personal data as possible, not just for their own use but also for sale to data brokers, who then feed the surveillance pricing ecosystem [2].
Second, surveillance pricing raises significant equity concerns. As demonstrated by the examples above, it can disproportionately burden people of color and other vulnerable groups, leading to higher costs for essential services or goods based on factors beyond their control. This creates a risk of exacerbating existing socio-economic disparities [2].
Third, the practice is inherently opaque. Many consumers are unaware they are being subjected to customized pricing, and even those who suspect it often cannot determine the reasons behind the price they are offered. This lack of transparency hinders consumer advocates from publishing meaningful price comparisons and makes it exceedingly difficult for regulators to identify and address unlawful pricing practices. While some proponents argue that surveillance pricing can lead to lower prices for some consumers, this often comes at the cost of higher prices for others, creating a system of winners and losers. More fundamentally, privacy is a fundamental human right, not merely a commodity to be bought or sold. Attempts to offer lower prices in exchange for surveillance, known as “pay-for-privacy” schemes, are problematic because they coerce individuals, particularly those with lower incomes, into surrendering their privacy [2].
California’s S.B. 2564: A Solution
In response to these harms, California’s S.B. 2564 proposes a direct and effective solution: “a retailer shall not engage in surveillance pricing.” The bill defines surveillance pricing as a customized price for a good or service offered to a specific consumer or group of consumers, based in whole or in part on personally identifiable information collected through electronic surveillance, even if that information is acquired from a third party [2].
The bill includes robust enforcement mechanisms, allowing both state and local governments to bring actions and seek various remedies, including monetary penalties. Crucially, it also provides a private right of action for individual consumers, enabling them to file lawsuits and seek injunctions and attorney fees. This private enforcement is vital for ensuring accountability. S.B. 2564 also outlines three key exemptions: price differences based solely on the costs of providing the good, discounts offered to consumers terminating a service, and uniformly available discounts conspicuously posted, such as those for signing up for a mailing list, membership in a broadly defined group (e.g., seniors), or participation in a loyalty program [2].
A Broader “Privacy First” Approach
The California bill aligns with a broader “privacy first” regulatory philosophy, advocating for a strong framework that prioritizes individual control over personal data. This approach emphasizes data minimization, requiring businesses to collect, store, use, and disclose data only when strictly necessary to provide requested services. It also champions the necessity of voluntary and informed opt-in consent for data processing, while explicitly banning coercive pay-for-privacy schemes and manipulative “dark patterns” [2].
S.B. 2564 is a specific application of the minimization principle, recognizing that consumers do not expect their online activities or physical movements to be compiled into personal dossiers for price manipulation. It also reinforces the “no pay-for-privacy” rule, preventing corporations from offering lower prices in exchange for surveillance, a practice that risks creating a society of privacy “haves” and “have-nots.” The bill shares similarities with efforts to ban online behavioral advertising, as both practices incentivize mass data collection, create surveillance-based dossiers, and manipulate economic choices. The lack of transparency in corporate price-setting makes specific legislation like S.B. 2564 essential, as general privacy laws often struggle to address the nuances of customized pricing [2].
Furthermore, S.B. 2564 is designed with minimal risk of unintended consequences, as it does not target specific technologies or limit general data collection, retention, or disclosure. Instead, it narrowly focuses on one specific, clearly defined use of data: setting customized prices. With its broad exemptions, the bill offers a balanced yet powerful tool to protect consumers from an insidious form of data exploitation [2].
The expiration of FISA Section 702 and California’s legislative push against surveillance pricing represent significant advancements for privacy rights in the United States. While the federal surveillance authority’s lapse may be temporary, it has reignited crucial discussions about oversight and accountability. Simultaneously, California
Sources
- [1] Victory! 702 has Expired! (www.eff.org)
- [2] Yes to California's Bill to Ban Surveillance Pricing (www.eff.org)
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