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The agency said businesses must clearly disclose when they use personal data to set prices, including the type of data used and the basis for the personalization
The Federal Trade Commission announced Wednesday that retailers who use personal data to set individualized prices may be violating federal consumer-protection law if they fail to disclose the practice to customers.
The agency released a proposed enforcement policy statement saying that businesses engaged in personalized pricing — the use of consumer data to estimate how much a specific individual is willing to pay — must make "clear and conspicuous" disclosures, including the fact that a price is personalized, the basis for that personalization, and the types of data on which it relies. Failure to do so likely constitutes an unfair or deceptive act or practice under Section 5 of the FTC Act, the commission said.
"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 statement. "Businesses that fail to tell consumers how their personal data is being used to set a price may be in violation of the FTC Act and other laws we enforce."
