The FTC Wants Companies to Tell You When They Set Personalized Prices

The Federal Trade Commission (FTC) has expressed concerns over personalized pricing practices, urging companies to disclose when they adjust prices based on personal data. The agency released a statement and proposal on Wednesday, seeking public comment on a policy to regulate personalized pricing, which it defines as using personal data to set prices based on a company's assessment of a consumer's willingness to pay.

FTC Chairman Andrew Ferguson stated that consumers should expect the same price regardless of personal data, and the FTC is concerned about businesses exploiting personal data to increase prices.

The FTC provided examples of how businesses might employ personal data to justify higher prices. For instance, a food delivery service could raise prices if it believes a customer is less likely or unable to pick up an order due to personal factors. Similarly, an online retailer might hike the price of an item after detecting that a customer has been physically present at the store or its parking lot while browsing the website.

While the FTC may not have the legal authority to outright ban personalized pricing, it could take action against companies that fail to disclose how personal data influences pricing, potentially violating the FTC Act and other relevant laws.

The timeline for implementing the proposed policy remains uncertain, and the FTC has not yet confirmed its response to the inquiry. In the meantime, the FTC suggests using virtual private networks (VPNs) or private browsing settings to potentially avoid personalized pricing practices. Consumers are also encouraged to consider alternative retailers if they suspect engaging in such practices.