FTC moves to make retailers disclose use of ‘personalized pricing’ as technology now enables broad consumer surveillance

The Federal Trade Commission (FTC) is taking steps to require retailers to disclose the use of customers' personal data in setting individualized prices, as technology now enables widespread consumer surveillance. The FTC is seeking public comment on an enforcement policy statement concerning "personalized pricing," which refers to the use of personal data to determine what price a company believes an individual consumer is willing to pay.

The proposal warns that failing to disclose the use of personal data to set prices could violate the FTC Act's prohibition on unfair or deceptive practices. FTC Chairman Andrew Ferguson emphasized that consumers expect prices to remain consistent, regardless of personal data. While the FTC cannot ban personalized pricing outright, companies that fail to inform consumers about the use of their data in pricing may violate the law.

The proposal is open for public comment until September 18. This move follows the FTC's scrutiny of "surveillance pricing" and the identification of pricing intermediaries that use consumer data—including location, demographics, credit history, and browsing history—to tailor prices. The regulator's action comes as consumers grapple with high inflation, particularly in the cost of groceries, which affects lower-income households the most.