Personalized pricing is “abhorrent,” but FTC limits may increase costs, critics say
Summary
The Federal Trade Commission (FTC) is considering new rules to limit personalized pricing, where companies charge different prices to different customers based on their personal data. The FTC wants businesses to clearly explain how they use personal data to set prices and to get customer consent. Some people worry these limits might reduce discounts or cause prices to rise.Key Facts
- Personalized pricing means charging each customer a different price based on their personal information.
- The FTC cannot ban personalized pricing completely but can penalize businesses that don’t disclose how prices are set.
- FTC Chair Andrew Ferguson said many consumers expect prices to be the same for everyone in stores.
- The FTC invited the public to comment on a proposed policy to restrict hidden personalized pricing practices.
- Research shows personalized pricing often helps businesses make more money but can hurt some consumers.
- If prices are misrepresented as the same for everyone when they’re not, that could break FTC rules.
- The FTC wants companies to tell customers what data they use for pricing and get permission to collect it.
- Consumers may not realize how much data they create or how it’s used to set individual prices.
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