The Guardian view on markets: buyer, beware | Editorial

Virgin trains has launched an app so that passengers can upgrade from standard by bidding for a seat in first class. For a minimum offer of £5, the free drinks and the antimacassars can be yours. It is your judgment against your fellow passengers’. Virgin’s airline businesses already do the same thing on their flights, through an app called Plusgrade, which is used by a score or more other airlines. The relationship between buyer and seller is becoming increasingly dynamic: the tactics of the bazaar facilitated by technology. The world of fixed prices and set margins is giving way to an endless unseen auction where what the buyer is willing to pay is assessed by an algorithm based on where the potential purchaser is located and what they have spent in the past. There is an asymmetry here: the advantage that the web appears to give to shoppers by enabling them to compare prices has been covertly subverted by sites like Amazon that have complete control over what prices appear to be available to any given buyer. Like Uber’s surge pricing, charging according to demand is a technique as ancient as the first commercial exchange. Yet it is also a betrayal of the idea of a fair price fixed by the cost of materials and labour modified by what the market will bear. The idea of a plush ride to Edinburgh for just a few pounds more than the basic fare is one thing. But when the middleman controls the price, neither producer nor consumer wins.