Your personal data, including your exact location, browser history and even mouse movements, is used by some companies to charge you personalized prices, according to a new FTC report.
The FTC’s study focuses on what it calls “intermediary firms,” which are intermediaries hired by retailers to use algorithms to adjust and target their prices.
This means that instead of the price of a product being static, the same product can have a different price or promotion depending on consumer data, including location, time, and channels through which the consumer purchases the product.
For example, the FTC says a consumer profiled as a new parent may be intentionally shown higher-priced baby thermometers on the first page of their search results. He also says many of the firms he examined have the ability to offer individualized and different prices and discounts based on “granular consumer data,” such as a cosmetics company targeting promotions for specific skin types and tones. .
FTC staff found that these brokers worked with at least 250 customers selling goods or services ranging from grocery stores to clothing retailers, concluding that widespread adoption of the practice “could fundamentally change the way consumers buy products.” and how companies compete”. The findings are drawn from documents provided by some of America’s best-known companies, including Mastercard, consulting firms Accenture and McKinsey & Co.
FTC Chairwoman Lina M. Khan said, “The FTC must continue to investigate surveillance pricing practices because Americans deserve to know how their private data is being used to set the prices they pay and whether firms are charging different people prices.” different for the same good or service.”
Knowledge about the existence of individualized pricing has been around for years. For example, travel influencers have long advised people to use VPNs to pass their location to low-income countries to try to get cheaper prices on international flights.
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The FTC said it is continuing to research the topic and has issued a request for public comment on consumers’ experiences with price surveillance. It also seeks feedback from businesses on whether surveillance pricing tools could give competitors an unfair advantage.
Much third-party research has already been conducted on the potential economic impact of personalized pricing on consumers. A paper by Yale economics professor Jidong Zhou found that this type of individualized pricing can lower prices for consumers in some cases, but when large companies monopolize significant amounts of data, it can lead to unfair prices.
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About Will McCurdy
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