The FTC Wants Companies to Tell You When They Set Personalized Prices
The FTC Wants Companies to Tell You When They Set Personalized Prices
The Federal Trade Commission says the price changes you see should depend on supply and demand, but some businesses have begun changing the price based on your online search or buying habits. The FTC says it wants to rein that in.
The agency released a statement and proposal Wednesday, asking for public comment on a policy on personalized pricing, which it defines as “the use of personal data to set prices according to the amount that a company believes an individual consumer is willing to spend.”
“When consumers see a listed price, they expect it to be same price that everyone else sees, not the retailer’s estimate of how much they are willing to pay based on their personal data,” FTC Chairman Andrew Ferguson said in a statement.
The FTC gave a few examples of how businesses may use your personal data to get you to pay more. A food delivery company could charge more if it believes you’re less likely to or unable to leave home to pick up your order. A business charging more for an item online after data shows you’ve been in the store or parking lot while browsing its website.
Ferguson said the FTC likely doesn’t have the legal authority to ban personalized pricing in every circumstance, but businesses that don’t tell you how your personal data is being used to determine a price could be in violation of the FTC Act and other laws enforced by the commission.
It’s unclear of next steps are for the FTC or how long it would take for the act to go into effect. The FTC did not immediately respond to a request for comment.
For now, the FTC recommends using a virtual private network or private browser settings to try to avoid personalized pricing practices from businesses. You can also stop shopping at retailers if you suspect that they engage in these practices.
Dashia is the consumer insights editor for CNET. She specializes in data-driven analysis and news at the intersection of tech, personal finance and consumer sentiment. Dashia investigates economic shifts and everyday challenges to help readers make well-informed decisions, and she covers a range of topics, including technology, security, energy and money. Dashia graduated from the University of South Carolina with a bachelor's degree in journalism. She loves baking, teaching spinning and spending time with her family. See full bio
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