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The FTC is turning its sights on personalized pricing. What does it mean for customers?

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The FTC is turning its sights on personalized pricing. What does it mean for customers?

The Federal Trade Commission is seeking comments on the practice, giving businesses yet another reason to be wary of implementing personalized or surveillance pricing.

The Federal Trade Commission is seeking public comment on personalized pricing, the practice of changing the price for a consumer based on their personal data and what businesses think a consumers is willing to pay.

“When consumers see a listed price, they expect it to be [the] same price that everyone else sees, not the retailer’s estimate of how much they are willing to pay based on their personal data,” FTC Chairman Andrew Ferguson said in a prepared statement on Aug. 19.

Consumers are anathema to what they see as the unfair pricing practices. With the FTC publication of its proposed enforcement policy statement, businesses have yet another reason to be wary of implementing personalized or surveillance pricing.

The FTC cannot ban personalized pricing outright, but those businesses that fail to tell consumers how their data is being used to set prices may be in violation of Section 5 of the FTC Act and other legislation, the FTC said.

The FTC’s focus on the topic also follows recent state laws from Maryland limiting surveillance pricing and Connecticut banning the practice. Over two dozen states have introduced more than 40 surveillance pricing bills, according to the law firm Holland & Knight.

The most well-known examples of personalized pricing are grocery deliveries, ride-share services, travel and hotel pricing, according to Jeannie Walters, founder of Experience Investigator s.


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