FTC Demands Answers on Whether Shopping Data Changes the Prices You See

Federal regulators have ordered major retailers, airlines and delivery platforms to explain whether personal information influences the prices consumers see. The Federal Trade Commission’s October 28 inquiry targets a potentially uncomfortable question for shoppers: could two people be charged different amounts for the same product or service because of data collected about them?

The FTC sent information orders to nine companies: Delta, United, JetBlue, Lyft, Uber, DoorDash, Instacart, Target and Walmart. The inquiry also asks how delivery and ride-hailing platforms use worker data to determine compensation. It is an information demand, not a finding that any company violated the law.

What the agency wants to examine

Personalized pricing can involve more than the familiar practice of raising prices when demand increases. The FTC is examining whether details such as a customer’s browsing activity, location or participation in loyalty programs are used to determine an individual offer. The question is whether information collected about a person changes what that person is asked to pay.

FTC Chairman Andrew Ferguson said the agency intends to scrutinize opaque systems that could produce different consumer prices or worker compensation for the same transaction. In announcing the inquiry, the commission also pointed toward broader questions about algorithms and artificial intelligence in commercial decisions.

The companies have 45 days after receiving their orders to supply information. The commission voted 2-0 to use its statutory study authority, which permits broad fact-gathering without beginning an enforcement case. Earlier FTC work examined intermediaries selling pricing technology; the new orders seek information directly from companies setting customer prices or worker pay.

What the inquiry does and does not establish

In August, the agency separately proposed guidance warning that undisclosed personalized pricing could violate consumer-protection law where it deceives shoppers. That proposal is not a blanket ban on charging different prices. Today’s orders are an information demand, not a conclusion that any recipient broke the law.

These distinctions are important because an information demand can cover companies with different practices. An airline’s demand-based fares, a store’s loyalty discount and a price tailored to one person’s inferred willingness to pay are not identical concepts. The FTC’s work is intended to establish which mechanisms are actually being used.

The commission previously described preliminary evidence that some retailers relied on outside firms to tailor online prices using information such as browsing history and shopping behavior. The new inquiry seeks more information from prominent companies whose services millions of consumers encounter routinely.

The records may inform a separate FTC consideration of disclosure requirements. For shoppers, the immediate development is scrutiny and potential transparency, not a new right to demand a particular price or a finding that a listed business has violated the law.

References: FTC orders Walmart and Delta to share how they use personal data | FTC Launches Personalized Pricing and Compensation Inquiry | FTC Seeks Comment on Enforcement Policy Statement Regarding Personalized Pricing