Hunton Retail Law Resource

The Federal Trade Commission has joined a handful of states that are taking aim at surveillance pricing.  The FTC recently announced a draft enforcement policy related to personalized pricing, which it defines as “the use of personal data to set prices according to the amount that a company believes an individual consumer is willing to spend.”   

The proposed enforcement policy recognizes that the FTC does not have the authority to prohibit personalized pricing in all circumstances.  Rather the FTC seeks to “aggressively” enforce Section 5 of the FTC Act with respect to personalized pricing that may be unfair or deceptive.  According to the policy statement, this may include: 

• Not disclosing the use of personalized pricing when consumers expect prices to be “static”; 

• Not making clear and conspicuous disclosures regarding the basis for personalization and the types of data on which such personalization is based; or 

• Not seeking consent for the use of consumer data for purposes of personalized pricing. 

The public will have 30 days to submit comments on the proposed enforcement policy once it is published in the Federal Register.  Given this news from the FTC and continued developments at the state level, including passage of legislation prohibiting or limiting personalized pricing, retailers should review their pricing practices.