The U.S. Federal Trade Commission announced on Wednesday that it is drafting a new enforcement policy aimed at personalized pricing, also known as surveillance pricing. The agency voted 2‑0 to release a draft statement that would interpret existing consumer‑protection law as prohibiting businesses from using a shopper’s personal data to set individualized prices without clear disclosure.
What is personalized pricing?
Personalized pricing refers to the practice of companies using information such as a consumer’s browsing history, location, household composition, or purchasing habits to calculate a price that may differ from the standard market price shown to other shoppers. The FTC says consumers generally expect a listed price to be the same for everyone, not an estimate based on what a retailer believes an individual is willing to pay.
Potential red‑flag examples
The commission highlighted several scenarios that could raise concerns. For instance, a delivery service might charge a higher price for milk if data shows multiple children live in a household. Similarly, a hotel could increase rates for guests traveling for a funeral based on personal information indicating the purpose of the trip.
Public comment period
The proposed policy will be open for public comment for 30 days, allowing consumers, businesses, and advocacy groups to weigh in. The FTC clarified that it is not taking a position on whether fully disclosed personalized pricing is inherently unfair, only that undisclosed use may violate anti‑deception rules.
State and congressional interest
Earlier this year, California Attorney General Rob Bonta launched a broad investigation into the use of personal data for individualized pricing. Lawmakers from both parties in Congress have also expressed concerns, signaling bipartisan interest in the issue.
Consumer‑group reactions
Grace Gedye, senior policy analyst at Consumer Reports, praised the FTC’s move, stating, “Nobody should have to pay more for groceries or other essential goods because a company knows what they’re searching for online, what their income is, the makeup of their household, or where they go.”
Lee Hepner, senior legal counsel at the American Economic Liberties Project, urged the agency to go further, likening the lack of transparency to “getting hit by a train while tied to the tracks and seeing it coming.”
Recent industry developments
In December, grocery‑delivery platform Instacart halted price‑testing that showed different shoppers varying prices for the same items, after a study by Consumer Reports and two nonprofit groups found price differences of up to 23 percent. In November, lawmakers asked Delta Air Lines to confirm whether it uses personal data for pricing; Delta responded that it does not set prices based on personal information.
Next steps
Stakeholders can submit comments through the FTC’s website during the comment window. The agency will review feedback before finalizing the rule, which could shape how businesses across the country price goods and services in the digital age.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
