FTC considers requiring disclosure of personalized pricing
The U.S. Federal Trade Commission said Wednesday it is considering requiring businesses to disclose whether they use personalized pricing data, a practice facing growing scrutiny from state and federal officials.
The FTC voted 2-0 to release a draft enforcement policy stating that the law against deceptive practices likely prohibits undisclosed use of personal data to set prices.
Surveillance pricing uses data such as browsing history, location and shopping habits to set individualized, algorithmic prices instead of standard market-wide prices.
“When consumers see a listed price, they expect it to be the same price that everyone else sees,” FTC Chairman Andrew Ferguson said.
Potential red flags include delivery companies charging more for milk based on data showing multiple children live in a household, or hotels charging more based on data showing a customer is traveling for a funeral.
The proposal will be open for public comment for 30 days. The FTC said it is not taking a position on whether fully disclosed personalized pricing is unfair.
California Attorney General Rob Bonta launched a broad probe in January, while lawmakers from both parties have raised concerns.
In December, Instacart ended price tests after a Consumer Reports study found some shoppers saw prices up to 23% higher for the same groceries.
In November, lawmakers questioned Delta Air Lines, which said it does not use personal information to set prices.
