The Federal Trade Commission is demanding information from Walmart, Uber and seven other companies on whether and how they use consumers’ personal data such as location, browsing history and income to set individual prices, wages and job offers, a senior FTC official said Wednesday.
The FTC is flexing its consumer protection powers ahead of the congressional elections next week, as voters consistently rank the cost of living as the most important issue.
Target, along with app services Lyft, DoorDash and Instacart, and airlines Delta, United, JetBlue, are also receiving demands, the official said.
The FTC will use the information to eventually publish a study to help inform regulators and lawmakers about personalized pricing and wage setting practices.
The advance of algorithmic pricing technology, including tools that incorporate AI, has fueled concern that companies are able to set prices for shoppers on an individual basis in order to extract the maximum price each shopper would be willing to pay.
Personalized pricing strategies are difficult to observe from the outside, because they serve different prices to different people.
The FTC study aims to fill in that knowledge gap, demanding comprehensive information about the tools, strategies, and data companies use as well as how they affect prices, wages and job offers.
Efforts by state lawmakers to ban personalized pricing, along with the use of algorithms to individually tailor wages, have taken off in recent years.
The National Retail Federation has criticized the laws and defended retailers’ use of data-driven discounts as a means of incentivizing loyalty.
FTC Chairman Andrew Ferguson has said personalizing pricing could violate consumer protection laws where consumers do not expect it and that companies should expect enforcement.
After the FTC called for public comment, hundreds of commenters urged the FTC to ban the practice outright.
The FTC has said it does not have the authority to issue a blanket prohibition against the practice.
JetBlue said it doesn’t use personal information or web browsing history to set individual pricing.
Fares are determined by demand and seat availability, and all customers have access to the same fares on jetblue.com and our mobile app.
A Delta rep said in a statement: “We have zero tolerance for discriminatory or predatory pricing and fully comply with applicable privacy, pricing, and advertising laws.”