The Federal Trade Commission (FTC) is seeking detailed information from Walmart, Uber, and several other companies regarding their use of consumer personal data—like location, browsing behavior, and income—to tailor individual prices, wages, and job offers. This was announced by a senior official at the FTC on Wednesday.
This move comes as the FTC ramps up its consumer protection efforts ahead of the congressional elections next week, with voters frequently citing the cost of living as a top concern.
Companies such as Target, as well as app-based services like Lyft, DoorDash, and Instacart, along with airlines including Delta, United, and JetBlue, are also under scrutiny, according to the official.
The information gathered will contribute to a study aimed at helping regulators and lawmakers better understand the practices of personalized pricing and wage setting.
There are increasing worries that advancements in algorithmic pricing, especially with AI capabilities, enable businesses to adjust prices for each individual shopper to extract the highest possible payment.
One of the challenges with personalized pricing is that it can be hard to detect since different prices are presented to different individuals.
The upcoming FTC study seeks to address this knowledge gap, requesting thorough details about the tools, methods, and data that companies use, as well as their impacts on prices, wages, and job offers.
Recently, some state lawmakers have pushed for bans on personalized pricing and the employment of algorithms to tailor wages for individual workers.
The National Retail Federation has criticized such legislative efforts, defending the use of data-driven discounts as a strategy to foster customer loyalty.
FTC Chairman Andrew Ferguson has indicated that individualized pricing can breach consumer protection laws, particularly in situations where it might not be expected. He emphasized that companies should be prepared for enforcement actions.
After the FTC invited public feedback, many commenters urged the agency to completely ban personalized pricing practices. However, the FTC has stated that it lacks the authority to impose a blanket ban.
In response to the FTC’s inquiry, JetBlue clarified that it does not utilize personal data or browsing history for pricing decisions. Instead, fare rates are determined by demand and seat availability, ensuring that all customers see the same prices on the JetBlue website and app.
A representative from Delta remarked that the airline maintains a strict policy against discriminatory or predatory pricing and complies fully with relevant privacy, pricing, and advertising regulations.
