The Federal Trade Commission (FTC) has released initial findings from its study on surveillance pricing, revealing that personal data such as precise location and browser history are often used to set individualized prices for consumers. This investigation is part of a broader effort to understand how third-party intermediaries influence pricing based on consumer characteristics and behaviors.
According to the FTC's analysis, retailers can track consumer behaviors ranging from mouse movements on a webpage to items left in an online shopping cart. These insights are then used to tailor pricing strategies. "Initial staff findings show that retailers frequently use people’s personal information to set targeted, tailored prices for goods and services—from a person's location and demographics, down to their mouse movements on a webpage," stated FTC Chair Lina M. Khan. She emphasized the importance of continued investigation into these practices.
The ongoing study involves documents obtained from companies like Mastercard, Accenture, PROS, Bloomreach, Revionics, and McKinsey & Co. The focus is on intermediary firms that algorithmically adjust prices based on various inputs such as consumer data and purchasing behavior.
To protect confidential trade secrets, the FTC will only release aggregated or anonymized data from this study. Hypothetical examples illustrate how some companies determine pricing based on granular consumer data—such as targeting promotions by skin type—or display higher-priced products based on search activity.
The study found that intermediaries collaborate with over 250 clients across industries including grocery stores and apparel retailers. This widespread practice could significantly alter consumer purchasing habits and market competition.
As part of its ongoing efforts, the FTC has issued a request for information seeking public comment on experiences with surveillance pricing. Businesses are also invited to share whether these tools create unfair competitive advantages or affect compensation for gig workers or employees. Comments are due by April 17.
The decision to issue the report was approved by a 3-2 vote among commissioners, with Andrew Ferguson and Melissa Holyoak dissenting regarding the release of initial research summaries.
Additional resources related to these interim findings include blog posts advocating further engagement with surveillance pricing issues and research summaries based on initial insights from the 6(b) study documents.
The FTC continues its mission to promote competition while protecting and educating consumers about potential threats like scams or fraudulent business practices.
