The Federal Trade Commission (FTC) announced on Wednesday that it is considering a new requirement for businesses to disclose if they use personalized data to set prices for individual consumers. The agency released a draft enforcement policy statement suggesting that the undisclosed use of personal information to adjust pricing likely violates federal laws against deceptive practices. The FTC voted 2-0 to advance the proposal, which now enters a period for public evaluation.
Personalized pricing, which the agency also refers to as surveillance pricing, involves using an individual's browsing history, location, shopping habits, and other personal metrics to set algorithmic prices. This differs from standard market-wide pricing where all customers see the same cost for a product. FTC Chairman Andrew Ferguson stated that consumers generally expect listed prices to be consistent for everyone rather than an estimate based on their personal data.
The agency identified several specific practices as potential concerns, such as delivery services charging more for groceries based on the number of children in a household or hotels increasing rates for customers traveling for funerals. This federal move follows an investigation launched in January by California Attorney General Rob Bonta into individualized pricing, as well as inquiries from both Republican and Democratic members of Congress.
A person would notice the change through mandatory disclosures on retail and service websites, revealing whether the price they are offered is individualized. These disclosures could influence consumer trust in digital marketplaces and lead to broader shifts in how algorithmic pricing is regulated by states. In November, lawmakers questioned Delta Air Lines on these practices; the company stated it does not use personal information to set prices. The FTC has not yet taken a position on whether these practices are legally "unfair" if they are fully disclosed, leaving a window for future policy adjustments regarding the legality of the pricing itself.
The public now has a 30-day window to provide feedback on the draft enforcement policy statement. Following the close of the comment period, the agency will determine whether to finalize the requirement. The specific date for a final vote or the implementation of the disclosure rules has not been reported. The FTC's action follows increasing scrutiny of how technology companies utilize consumer data to maximize revenue through individualized cost adjustments.