FTC targets personalized prices based on consumer data
The agency says businesses should disclose personalized prices and the data used, while enforcing consumer protection laws against unfair or deceptive pricing.
- The Federal Trade Commission is putting companies on notice over personalized pricing this week, proposing that businesses clearly disclose when prices are adjusted using personal data.
- Under Section 5 of the FTC Act, unfair or deceptive practices are unlawful. The FTC stated it cannot ban personalized pricing entirely but plans to aggressively enforce existing consumer protection laws against such practices.
- The FTC included hypothetical examples of concerning practices, such as a ride-share company charging more based on data revealing a user has not installed competitors' apps, termed "Apps on the user."
- Several states, including Maryland, New Jersey, and Connecticut, have already restricted personal data use in pricing, while The National Retail Federation seeks to protect loyalty programs offering tailored discounts.
- Public comments on the proposed policy are open until Sept. 18, and not every use of personal data in pricing results in a higher cost for the shopper.
16 Articles
16 Articles
A hotel could charge you more if it knows that you travel to attend a funeral. A supermarket, increase the price of milk if it detects that you live with several guys. And a transportation app, charge a higher rate if it infers that you need to urgently arrive at a hospital.These are some of the scenarios that the Federal Trade Commission of the United States (FTC) put forward to warn about so-called personalized prices: values that can vary fro…
The FTC’s Personalized Pricing Policy Targets Where AI Meets the Consumer Wallet
The FTC’s August 19 draft policy statement targets the use of personal data in AI-driven pricing, marking a shift from policing marketing claims to regulating the operational outcomes of algorithmic systems. Where the Commission’s enforcement record has focused on companies that overclaim their AI capabilities, this new framework goes after the machines themselves—or more precisely, the companies that deploy them to charge different prices to di…
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