FTC Proposes Aggressive Enforcement on Personalized Pricing
The Federal Trade Commission has issued a proposed enforcement policy statement indicating it will use its authority under Section 5 to target companies that fail to clearly disclose their use of consumer data to set individualized prices.
The U.S. Federal Trade Commission has released a proposed enforcement policy statement signaling its intent to aggressively pursue companies that engage in undisclosed personalized pricing. This practice, which the agency also refers to as “surveillance pricing,” involves using a consumer’s personal data—such as browsing history, location, and demographics—to set a unique price for that individual. Sophisticated clients across e-commerce and other consumer-facing sectors should take note, as the FTC is framing the failure to provide clear and conspicuous disclosure as a potentially unfair or deceptive act under Section 5 of the FTC Act. The agency's proposal does not seek to ban personalized pricing outright, acknowledging it lacks that authority from Congress. Instead, the focus is squarely on transparency. The FTC suggests that representing a price as static when it is in fact individualized could mislead consumers. Businesses using these pricing models should review their user interfaces and terms of service to ensure their disclosure practices are robust. The proposal is now open for a 30-day public comment period.