US FTC Moves to Curb Hidden Personalized Pricing

The US Federal Trade Commission (FTC) has taken a significant step toward regulating the practice of "surveillance pricing," where companies use personal data to set individualized prices for consumers. In a unanimous 2-0 vote, the agency released a draft enforcement policy statement indicating that such undisclosed practices likely violate federal law against deceptive acts.

The proposed policy would require businesses to clearly disclose when they use personal information—such as browsing history, location, and shopping habits—to determine the price a specific consumer sees. FTC Chairman Andrew Ferguson emphasized that consumers reasonably expect a listed price to be uniform, not a tailored estimate of their willingness to pay.

The FTC highlighted several potentially problematic scenarios, including delivery services charging more for milk to households with multiple children, or hotels raising rates for customers traveling to funerals. The draft policy is now open for 30 days of public comment.

This move comes amid growing scrutiny from state and federal officials. California's attorney general launched a broad investigation into the practice in January, and lawmakers from both parties in Congress have raised concerns.

Consumer advocacy groups welcomed the FTC's action. Grace Gedye of Consumer Reports said no one should pay more for essentials because a company knows their online searches, income, or household composition. Lee Hepner of the American Economic Liberties Project urged the FTC to go further, comparing advance notice of the practice to seeing a train coming while still tied to the tracks.

The issue gained prominence after Instacart ended price tests in December that showed different shoppers different prices for the same groceries. A study by Consumer Reports and two other nonprofits found some shoppers saw prices up to 23% higher than others for identical items. Lawmakers also questioned Delta Air Lines in November about its pricing practices, with the airline denying that it sets prices based on personal information.