David J. Phillip/AP Photo
A Walmart associate fulfills online grocery orders at a Walmart Supercenter in Houston.
States have scrambled to expand a U.S. Department of Agriculture (USDA) pilot allowing recipients of food stamps (known formally as the Supplemental Nutrition Assistance Program, or SNAP) to buy groceries online to avoid exposure to COVID-19. However, a recent report by the Center for Digital Democracy (CDD) finds that monopolist online retailers, most prominently Walmart and Amazon’s online retail arms, are surveilling and targeting SNAP users with manipulative advertising to push unhealthy foods, induce impulsive purchases, and increase overall spending.
While these personalized and predatory marketing techniques increasingly influence all e-commerce shoppers, CDD and civil rights groups such as Color of Change and UnidosUS argue that targeted ads and data collection have disproportionate and potentially discriminatory impacts on the low-income communities and people of color who participate in SNAP.
The groups sent a letter to the USDA urging that the agency implement stronger privacy protections for the pilot, limiting the information that retailers can collect on SNAP recipients and how it can be used. This includes a ban on manipulative marketing techniques.
“Providing enhanced access to healthy and nutritious foods at the expense of the privacy and health of communities of color is too high of a price,” said Steven Lopez, director of health policy at UnidosUS. “Predatory marketing practices have been linked to increased health disparities for communities of color. The USDA must not ignore that fact and should take strong and meaningful steps to treat all participants fairly, without discriminatory practices.”
The USDA’s online SNAP pilot does not include sufficient privacy protections for users, allowing retailers to collect and share a copious amount of granular data.
In April 2019, the USDA launched a two-year pilot allowing SNAP recipients in some states to use electronic benefit transfer cards to buy groceries online. The program has rapidly accelerated to 40 states, after the COVID-19 pandemic introduced new risks to in-person grocery shopping.
In addition to this benefit, online SNAP delivery has the potential to substantially increase convenience and food access for recipients, especially those with disabilities or without access to a full-service grocery store. Several studies find that limited access to fresh foods in low-income communities and communities of color in both urban and rural areas is a leading driver of racial and socioeconomic health disparities, including rates of obesity and diabetes.
However, the CDD’s recent report finds that the USDA’s online SNAP pilot does not include sufficient privacy protections for users, allowing retailers to collect and share a copious amount of granular data on everything from users’ shopping habits, location, browsing history, financial status, ethnicity, health conditions, and more.
All grocery shoppers, in person or online, are subject to surveillance and manipulation. For instance, Target’s shopper tracking program can predict when a customer is pregnant, down to the rough due date, and target expectant mothers with baby supplies by e-mail or app notifications, depending on the type of promotions they’ve clicked on before.
But the online SNAP marketplace is especially skewed toward large food corporations peddling less-healthy options. In 85 percent of participating states, Walmart and Amazon are the only retailers currently accepting online SNAP benefits. Not only does this fortify these Goliaths’ data dominance with near-exclusive insights into SNAP recipients’ purchasing habits, but both sites have been shown to give preferential treatment to Big Food partners, such as Coca-Cola and Barcel, in their digital marketplaces, according to the report.
Large food corporations in particular have more resources to shell out for aggressive targeted marketing and personalized coupons built around user data collected across the internet, including e-commerce sites. With the help of advanced data analytics, behavioral economics, and machine learning, advertisers create highly personal promotions designed to nudge individuals to make impulsive purchases of foods they might not be looking for, or drive up their overall spending. Further, the corporations that invest the most in targeted deals and marketing tend to push more processed and unhealthy foods.
A study of online food and beverage promotions in the D.C. area by the Center for Science in the Public Interest found that corporations selling sugary drinks and fatty, salty, or sugary foods eclipsed healthier, even less expensive products in search results and e-mail promotions, including on Walmart and Amazon.
“This is not a level playing field,” says Jeffrey Chester, executive director of CDD and co-author of the report. “The market is rigged to favor the companies with the biggest ad budgets and those that have relationships with the platforms.”
SNAP users may also be more likely targets of Big Food advertising. Research has found that unhealthy food vendors disproportionately market to low-income communities and communities of color. One study linked this “double dose” of targeted marketing to Black and Latino youth, in particular, with racialized health disparities. Over 60 percent of SNAP recipients are people of color, so generating a new stream of data from their online food purchases, paired with modern data-driven targeting, could make this problem even worse.
Advertisers create highly personal promotions designed to nudge individuals to make impulsive purchases of foods they might not be looking for, or drive up their overall spending.
The USDA forbids retailers from discriminating against or offering different prices to SNAP recipients, and the same holds true online. But black-box algorithms that churn out personalized prices and promotions could run afoul of this standard by inadvertently targeting SNAP users based on conflating characteristics, such as estimated income. Because nobody sees the same price, it’s harder to discern the marketing campaigns and their impact.
Discriminatory marketing based on SNAP purchasers’ data could carry into other markets. Monopolists Walmart and Amazon are expanding into financial services and health care, for instance, raising serious concerns about the ways that SNAP users could be discriminated against in pricing health insurance or targeted for predatory financial products. E-commerce sites also share SNAP recipients’ purchasing data with a whole host of third parties.
“They know all this stuff about you, and it bleeds into other areas,” Chester says. “Run out of money in the middle of the month? We can offer you a payday loan. There’s just no limit to how this data can be used, and it’s unconscionable that the USDA allowed this program to evolve without these safeguards.”
CDD, along with public-health and civil rights groups, is urging the USDA to limit the kind of data that retailers can collect about SNAP participants, as well as to limit how that data can be used. They’re also calling for a ban on manipulative marketing techniques designed to “take advantage of consumers’ psychological vulnerabilities” or “foster impulsive behavior.” These organizations also want a consistent, strong privacy policy valid for all participating retailers—rather than relying on corporate privacy policies—and increased support for smaller and independent retailers to participate in the program.
Ultimately, the report finds that the privacy, consumer protection, and discrimination issues raised by the SNAP online pilot reveal an underlying lack of federal privacy protections for all users. Some thinkers have proposed banning targeted advertising or price discrimination outright, to remove tech Goliaths’ financial incentive to surveil users.
