FTC Proposes Disclosures for Personalized Pricing

The Federal Trade Commission (FTC) is initiating a move to mandate that retailers disclose their use of customer personal data for setting prices, a practice increasingly enabled by advanced technology that allows for broad consumer surveillance. The agency is soliciting public feedback on an enforcement policy statement specifically addressing "personalized pricing." The FTC defines personalized pricing as the utilization of an individual consumer's personal data to ascertain the maximum amount that consumer is believed to be willing to spend on a product or service. This proposed policy aims to alert companies that withholding information about their use of personal data in price determination could constitute an unfair or deceptive practice, thereby violating the FTC Act. FTC Chairman Andrew Ferguson stated in a press release that consumers generally expect a listed price to be uniform for all shoppers, not a retailer's estimation of their individual willingness to pay based on their data. While the FTC acknowledges it does not possess the authority to prohibit personalized pricing in all situations, businesses that fail to inform consumers about how their personal data influences pricing may face repercussions under the FTC Act and other statutes enforced by the agency. The FTC did not immediately provide further comment when contacted by Fortune. The public comment period for this proposal is open until September 18. This regulatory action follows over two years of intensive examination by the FTC into what it terms "surveillance pricing." In July 2024, the FTC formally requested information from eight companies operating within the pricing technology sector. These companies were required to detail their methods for leveraging customer data, which includes information such as precise location, demographic profiles, credit history, and browsing or shopping habits, to inform their pricing strategies. At that time, then FTC Chair Lina M. Khan emphasized the public's right to know if businesses are employing detailed consumer data for "surveillance pricing" and highlighted the FTC's inquiry as a means to illuminate this opaque network of pricing intermediaries. The FTC's findings, released in January 2025, indicated that pricing intermediaries could potentially utilize a wide array of consumer information, ranging from a consumer’s exact geographic location and demographic details to their online activities and purchase history, to dynamically adjust prices. This data can be aggregated and analyzed to create granular consumer profiles, enabling highly individualized pricing strategies. The implications of such practices extend to various sectors, potentially impacting consumer trust and market fairness. The FTC's proposed policy seeks to establish a baseline of transparency, ensuring consumers are aware when their data is being used to influence the price they are offered, thereby mitigating the potential for exploitative pricing tactics and fostering a more equitable marketplace. The agency's action underscores a growing concern among regulators about the pervasive use of personal data in commercial transactions and its potential to create information asymmetry between businesses and consumers.