Still, what's most alarming about a future in which privacy stratifies along income lines is that companies have an incentive to recreate the biases that many of us encounter in our daily lives. In the United States, differential pricing is perfectly legal unless it's specifically intended to harm consumers or inhibit competition. In 1996, for instance, Denise Katzman, a feisty New York film producer, filed a class-action lawsuit against Victoria's Secret after she discovered that the lingerie company sent out virtually identical catalogs to male and female subscribers, but offered men deeper discounts on some items. Katzman stumbled on the price differences only because a male coworker had left his catalog lying around the office. Such discoveries are harder to make on the internet.
Consumers visiting the same website have little way of knowing who's getting what price or why.
The scheme was a crude foreshadowing of things to come. However, internet retailers may use complex consumer information, along with shopping behavior, to go beyond a binary separation of consumers who compare prices and those who do not. The ability of computers to store and process large amounts of information may make other forms of price discrimination possible, and very profitable, for internet retailers. Zero-Knowledge president and cofounder Austin Hill doesn't foresee an online privacy gulf between rich and poor. Rather, he believes that ISPS will soon realize the value of privacy and start to bundle cloaking features like his into their internet services.