The Federal Trade Commission (FTC) released a proposed enforcement policy statement Wednesday warning businesses that "personalized pricing" based on consumer data could violate federal law. The agency stated that charging different prices for the same goods or services based on an individual's personal information, such as browsing habits or purchase history, may be considered a deceptive practice under the FTC Act.
The FTC Act prohibits unfair or deceptive practices in the marketplace. While the agency noted it cannot ban personalized pricing in every instance, it asserts the authority to discipline companies that fail to disclose how they use personal data to set specific prices. The commission argued that consumers generally expect uniform pricing when shopping online or in physical retail stores.
The proposal identifies several scenarios that could constitute violations, such as a grocery store charging more for milk because it knows a household has multiple children, or a ride-hailing service increasing rates for a trip to a hospital during a suspected medical emergency. FTC Chairman Andrew Ferguson stated the agency aims to hold businesses accountable for failing to inform consumers about data-driven price adjustments.
A person would notice the impact of this policy through clearer disclosures on retail websites and apps. Rather than seeing a single price, shoppers would be informed if the cost they are viewing has been adjusted based on their income, education level, or family size. The move aims to address what consumer advocates describe as hidden discrimination, where individuals with less technical literacy or fewer resources to circumvent tracking bear a higher financial burden.
The knock-on effects could force major changes in how retail and service algorithms function across the United States. Following investigations into its AI price-testing tools, Instacart has already stated it would end that specific program. The FTC is currently accepting public comments on the proposal, which will help determine the final version of the enforcement policy. While a specific effective date for the final policy was not reported, the agency's current stance signals increased scrutiny of data-driven price testing in the immediate future.