The Federal Trade Commission (FTC) has issued demands for information to Walmart, Uber, and seven other companies, seeking details on how they utilize personal consumer data to determine individualized prices, wages, and job offers. A senior FTC official confirmed the action on Wednesday.
The investigation comes as the cost of living remains a top concern for voters ahead of the upcoming congressional elections, with the FTC leveraging its consumer protection authority. Companies receiving these demands include Target, ride-sharing services Lyft, delivery platforms DoorDash and Instacart, and airlines Delta, United, and JetBlue.
The FTC intends to use the gathered information to produce a study that will inform regulators and lawmakers about the practices of personalized pricing and wage setting. The increasing sophistication of algorithmic pricing technologies, including those employing artificial intelligence, has raised concerns that companies may be able to tailor prices to individual consumers to maximize their willingness to pay.
Personalized pricing strategies are inherently difficult to observe externally, as they involve presenting different prices to different individuals. The FTC's study aims to address this knowledge gap by collecting comprehensive data on the tools, strategies, and datasets companies employ, as well as their impact on prices, wages, and job offers.
Efforts to curb personalized pricing and algorithm-driven wage adjustments have gained momentum among state lawmakers in recent years. However, the National Retail Federation has pushed back, arguing that data-driven discounts are a legitimate method for retailers to reward customer loyalty.
FTC Chairman Andrew Ferguson has previously stated that personalized pricing could potentially violate consumer protection laws, particularly when consumers are unaware of the practice. He has indicated that companies should anticipate enforcement actions.
Following an FTC call for public comment, numerous individuals urged the agency to enact a complete ban on personalized pricing. However, the FTC has stated it lacks the authority to implement such a broad prohibition.
JetBlue has asserted that it does not use personal information or web browsing history to set individual fares, stating that its pricing is determined by demand and seat availability. The airline maintains that all customers have access to the same fares through its website and mobile application.