The Federal Trade Commission has ordered Walmart, Uber, Target and other firms to explain personalized pricing, including whether personal data changes what shoppers pay or workers earn. A senior FTC official told Reuters on Wednesday about those information demands, CNBC reported, while the outlet separately said the agency is using consumer-protection powers ahead of congressional elections next week, as voters consistently rank the cost of living as the most important issue. The material will feed a study for regulators and lawmakers on how individualized prices and wages are set.
Key Takeaways
- FTC ordered nine firms to detail personalized pricing and wages.
- Pricing methods and AI use must cover the period since Jan. 1, 2023.
- Instacart and Delta deny setting prices from personal data.
- Hundreds urged a ban; the FTC says it lacks that authority.
What the Personalized Pricing Orders Require
According to CNBC’s report on the FTC demands, the agency wants to know whether firms use personal data such as location, browsing history and income to set individual prices, wages and job offers. Business Insider’s account of the orders adds that companies must submit pricing methodologies, including how they use AI, going back to Jan. 1, 2023. The same orders also ask for research the companies have done on pricing strategies, such as A/B tests, without tying that research request to the same start date.
Personalized pricing is hard to see from the outside, because people can be shown different prices, CNBC noted. The study is meant to close that gap on tools, strategies, data and effects. Algorithmic tools, including those that use AI, have fueled concern that a company can charge each shopper the most that shopper would pay.
Across both reports, companies are being asked to document:
- Personal data used for prices, wages and job offers
- Pricing methods and AI use since Jan. 1, 2023
- Research on pricing strategies, including A/B tests
- Technology used to offer workers jobs
Who Received the Pricing Demands
CNBC said Walmart and Uber are on the list, plus seven other companies: Target, Lyft, DoorDash, Instacart, Delta, United and JetBlue. Business Insider described the sweep as running from retailers to food-delivery services to airlines. The Commission said on Wednesday that it sent the orders.
| Company | Sector cited | What these reports say |
|---|---|---|
| Walmart | Retailer | Would be transparent as digital price tags spread |
| Target | Retailer | Would be transparent as digital price tags spread |
| Instacart | App service | Does not use personal information to set prices |
| Delta | Airline | No fare product uses personal data for individual offers |
| Uber | Food delivery | Payouts consider factors such as demand, not a per-mile or per-minute rate |
Company Answers and the Loyalty Defense
Business Insider quoted FTC Chairman Andrew N. Ferguson:
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.
He added, in the same report, “Workers also deserve to know if their compensation is affected by how companies use their personal data.”
A Delta spokesperson told Business Insider, “There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized offers based on personal data.” Instacart said in a statement, “We do not use personal information to set prices, and we never will.” That denial is now relevant for readers tracking Instacart sale talks.
Walmart and Target previously said they would be transparent about their pricing strategies as more stores start using digital price tags, Business Insider reported. These reports do not quote either retailer confirming or denying individualized prices.
Efforts by state lawmakers to ban personalized pricing, and algorithms that individually tailor wages, have taken off in recent years, CNBC reported. The National Retail Federation has criticized the laws and defended retailers’ use of data-driven discounts as a means of incentivizing loyalty.
After the FTC called for public comment, hundreds of commenters urged an outright ban. The FTC has said it does not have the authority to issue a blanket prohibition against the practice. CNBC also reported that Ferguson has said personalizing pricing could violate consumer protection laws where consumers do not expect it, and that companies should expect enforcement.
What Retail Pricing Teams Should Watch
For marketers, the implication is a documentation standard, not a new national ban. Loyalty discounts, digital shelf tags and demand-based pay now sit next to a file request that names pricing methods and AI use back to Jan. 1, 2023, plus separate research such as A/B tests. The NRF defense of data-driven discounts holds only if that discount is not a higher price estimated from browsing history, location or income, the practice Ferguson described.
A growing number of companies use dynamic pricing for items from concert tickets to jeans, Business Insider reported. The narrower question, for pricing teams, is whether personal data sets the figure. Uber driver payouts, which Business Insider said are not based on a per-mile or per-minute rate and instead consider factors such as demand, show why wage files are in scope.
CNBC linked the push, in its own narration, to elections next week and the cost of living. For merchants, pricing methodologies back to Jan. 1, 2023 may have to be explained later. Teams following Walmart’s opening to AI shopping agents should note that AI use in pricing methodologies is an explicit part of the orders.
