FTC Proposes Enforcement Policy on Personalized Pricing

The U.S. Federal Trade Commission is targeting personalized and dynamic pricing with a newly proposed enforcement policy statement. The announcement signals the agency's intent to use its authority under Section 5 of the FTC Act, which prohibits unfair or deceptive acts, to scrutinize businesses that use consumer data to set individualized prices. The policy, which is not a formal rule or ban, focuses on transparency and fairness. It posits that failing to clearly disclose that prices are personalized, the basis for the personalization, and the types of data used may be an unfair or deceptive practice. The FTC also highlighted concerns about deceptive framing, such as presenting a higher price as a special discount, and unfairness that occurs when concealment prevents consumers from avoiding harm. The proposal provides several examples of potentially unlawful conduct, including a delivery service charging higher prices to consumers whose data suggests they are homebound. The agency is seeking public comment on the proposal.