U.S. regulator targets personalised pricing as consumers worry about price hikes

The U.S. Federal Trade Commission (FTC) is intensifying its efforts to regulate personalized pricing practices, aiming to protect consumers from potential discrimination and ensure transparent business operations. The FTC argues that the increasing amount of data generated by consumers through modern technology enables sellers to tailor prices based on individual willingness to pay.

Personalized pricing, also known as price discrimination, involves setting distinct prices for the same product or service based on collected customer data. This practice extends beyond traditional price variations and can include factors such as customers' online behavior, demographic information, and even personal characteristics like gender, race, or age. An example might be a ride-hailing app charging higher prices for female users during nighttime hours, assuming they are more willing to pay for quick home delivery.

While the FTC emphasizes the need for transparency in disclosing why personalized pricing is employed and which data sources are utilized, it does not have the authority to outright ban this practice. FTC Chairman Andrew Ferguson acknowledged that the agency could enforce existing laws requiring businesses to be more open about their data usage in determining prices.

Public comments on the FTC's proposed actions have varied, with some advocating for stricter regulation against discrimination and others expressing concerns about potential government overreach in business operations. The FTC warns that consumers may take steps to avoid higher personalized prices, such as using virtual private networks or shopping with retailers less likely to employ personalized pricing tactics.