Your browsing history could decide how much you pay on purchases: 9 firms under US FTC scrutiny over personal data

The US FTC said it will examine whether consumers are charged different prices for the same product or service based on factors such as their browsing habits and personal data.

The US Federal Trade Commission (FTC) has ordered nine major companies, including airlines, ride-hailing platforms, food-delivery services and retailers, to provide detailed information on how they use personal data to determine prices and worker compensation.

The agency said the information would help it examine whether consumers are charged different prices for the same product or service based on factors such as their browsing habits, personal data and loyalty programme membership.

The orders were issued to Delta Air Lines, United Airlines, JetBlue, Lyft, Uber, DoorDash, Instacart, Target and Walmart. The companies have 45 days from receiving the orders to respond.

“We intend to scrutinize the opaque methodology that some companies in these industries may be using to determine how much consumers pay or how much gig workers are paid for the same product or service,” FTC Chairman Andrew N. Ferguson said.

“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. Workers also deserve to know if their compensation is affected by how companies use their personal data,” he added.

Can companies charge different prices based on personal data?

The FTC's investigation will examine whether prices for airline tickets, rides, food deliveries and other products or services vary between individuals based on their personal information or participation in loyalty programmes.

The agency will also look at the role of advanced algorithms in making these pricing decisions, including whether companies analyse customer data to determine how much an individual might be willing to pay.

Personalised pricing refers to the practice of offering different prices to different consumers for the same product or service based on information about them. The FTC's orders seek to establish what data companies collect, which tools they use to analyse it and how that information influences pricing decisions.

The investigation does not establish that any of the nine companies has engaged in unlawful pricing practices. Instead, the FTC is seeking information to understand how their pricing systems work.

Gig workers' pay also under scrutiny

The investigation will also examine whether ride-hailing and food-delivery platforms use workers' personal data to determine compensation offers.

Unlike conventional employment arrangements in which salaries or hourly wages are generally specified, platforms may make varying offers to drivers and delivery workers through automated systems.

According to the FTC, such compensation decisions could depend on factors including workers' phone usage and their history of accepting or rejecting previous offers.

The orders require the companies to document the information, tools and procedures used to determine or adjust prices and compensation.

The agency said workers deserve greater transparency about whether their personal data affects how much they are offered for completing the same work.

Companies have 45 days to respond

The nine companies must provide the requested information within 45 days of receiving the orders.

The FTC issued the orders under Section 6(b) of the FTC Act, which allows the commission to conduct broad investigations into business practices even when the inquiry is not tied to a specific law-enforcement action.

The commission said it can seek to compel compliance through federal court if a company fails to provide the required information.

The investigation comes as regulators examine how businesses use consumer data and automated systems to make commercial decisions. Its findings could provide further insight into the extent to which personal information influences the prices consumers pay and the compensation gig workers receive.