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FTC Fights Personalized Pricing Tactics
20 Aug
Summary
- Personalized pricing uses data to set individual prices.
- FTC wants prices to reflect supply and demand.
- Consumers expect prices to be the same for everyone.
The Federal Trade Commission (FTC) has proposed a policy to address personalized pricing, a practice where companies use consumer data to determine individual prices. The agency seeks public comment on this issue, emphasizing that consumers expect listed prices to be consistent for everyone, not tailored to an individual's perceived willingness to pay.
Examples cited by the FTC include a food delivery company charging more to customers less likely to pick up orders themselves. Another scenario involves businesses increasing online prices after detecting a customer's physical presence near a store while browsing online.
FTC Chairman Andrew Ferguson stated that the commission may not have the authority to ban personalized pricing outright in all situations. However, businesses failing to disclose how personal data influences pricing could contravene the FTC Act and other regulations.
For consumers seeking to avoid these practices, the FTC recommends using virtual private networks or private browser settings. Additionally, shoppers are advised to cease business with retailers suspected of employing personalized pricing.
The timeline for potential FTC actions or policy implementation remains unclear, as the agency has not provided further details on next steps.
