The Federal Trade Commission has ordered nine companies, including Walmart and Target, to provide information about how they set prices and whether personal data influences what individual consumers are offered. The inquiry also covers Delta, United, JetBlue, Uber, Lyft, DoorDash and Instacart.
The agency approved the orders on Oct. 28 in a 2-0 vote. The requests were issued under Section 6(b) of the FTC Act, which allows the commission to conduct market studies without alleging that a particular company violated the law. Issuing the orders does not establish that any recipient broke the law.
What the FTC is examining
The review distinguishes between ordinary dynamic pricing and personalized pricing. Dynamic pricing changes in response to factors such as supply, demand or a competitor’s prices. Airline fares and ride-hailing surcharges are common examples. Personalized pricing, by contrast, uses information connected to a shopper to help determine the amount that person is shown, including an estimate of how much the shopper might be willing to pay.
“Consumers deserve to know whether companies use their web surfing habits or other personal data to estimate the highest price they can charge each consumer.” — FTC Chairman Andrew Ferguson
The commission’s 15-page order seeks details about the data, software and methods used in pricing decisions. The requests ask companies to explain how they group customers, when employees or systems override a pricing result and how the companies test their approaches.
- The definition of pricing includes posted prices, coupons, discounts and promotions.
- Personal information identified in the inquiry includes browsing and purchase histories, location, income and information inferred from other data.
- Most requests cover practices beginning Jan. 1, 2023; one request for research and testing reaches back to 2021.
| Inquiry detail | Information reported |
|---|---|
| Companies involved | 9 |
| FTC vote | 2-0 |
| Order length | 15 pages |
| Legal authority | Section 6(b) of the FTC Act |
Why the review matters
The inquiry could clarify how large companies use consumer information when setting prices. It also asks about employment practices, including whether companies use workers’ personal information when determining compensation. The agency has not announced a finding that any of the nine companies uses unlawful personalized pricing.
The FTC’s requests include practices at retailers and online platforms, where prices can change quickly and where consumers may receive discounts or offers through digital systems. The review therefore covers more than the price printed on a shelf or displayed as a standard offer. It also reaches the information and automated processes that may influence a price shown to a particular person.
Companies must provide the information requested by the commission. The orders are part of a market study, rather than an enforcement action based on a completed finding of wrongdoing. Any later action would depend on what the FTC learns from the companies’ responses.
