The Federal Trade Commission (FTC) is seeking public comment on a proposed enforcement policy statement regarding personalized pricing—the practice of using individual consumer data to set prices according to how much the consumer appears willing to spend.
Stopping short of prohibiting personalized “surveillance” pricing, the FTC’s draft statement contends that undisclosed price personalization can deceive, mislead, and harm consumers in violation of Section 5 of the FTC Act. Interestingly, the policy statement appears to build on work begun in the Biden administration under then-FTC chair Lina Khan’s leadership. The statement also appears in conflict with the Trump administration’s “anti-regulation” approach.
To avoid liability, the FTC encourages retailers to clearly and conspicuously disclose their pricing practices, which the agency argues will enable consumers to modify their behavior and make informed purchasing decisions.
According to the FTC, consumers do not expect prices to be static. However, apart from insurance, credit, and other risk-based offerings, consumers reasonably expect prices to vary based on market conditions, not their health, income, and browsing history.
FTC Targets Undisclosed Personalized Pricing Practices
In the draft statement, the FTC argues that, unlike ordinary shifts in supply and demand that impact price, data-driven personalized prices can deceive and injure consumers. The FTC emphasizes that when consumers are unaware prices are based on their personal characteristics, consumers cannot respond by finding another seller, modifying purchasing behavior, or restricting access to their personal data. The FTC’s draft statement is limited to pricing practices and does not extend to targeted advertising using consumer data.
In the draft statement, the FTC concedes it lacks the authority to ban the pricing practice outright. However, the FTC maintains that a retailer engaging in certain undisclosed or misleading pricing practices may violate the FTC Act’s general prohibition on unfair and deceptive acts or practices. To be deceptive, an act must involve a representation, omission, or practice that is material and is likely to mislead a reasonable consumer to their detriment. An act is unfair if it is likely to cause substantial, unavoidable injury to consumers that is not outweighed by countervailing benefits.
The FTC advises that if a retailer represents that a price is static—or fails to dispel reasonable consumer assumptions that a price is widely offered—the undisclosed personalized pricing may be deceptive and unlawful. Businesses may also violate Section 5 when they mislead consumers about the basisfor a personalized price.
For example, if a retailer leads a consumer to believe their price is based on their purchase history, such as a loyalty discount, but is actually based on information about the consumer’s disposable income, web search history, or other undisclosed factors, the FTC contends that the consumer is deceived into forgoing alternative options and paying higher prices. According to the FTC, because this practice can create substantial injury that unwitting consumers cannot reasonably avoid, undisclosed personalized pricing may also be unfair under Section 5.
Consumer Data Can Create Pricing Liability
In addition, the FTC notes that the collection, use, and disclosure of consumer data for personalized pricing may itself violate the law. Consumers who have consented to their data being collected may not necessarily have consented to the use of that data to influence the price they pay. The FTC declined to disclose whether in its view any personalized pricing practices are unfair even when fully disclosed.
The FTC’s draft policy statement provides the following non-exhaustive list of pricing practices that, if undisclosed or misleadingly described, may give rise to FTC enforcement:
- A food delivery company quoting a higher price to consumers based on personal data implying they are less likely or unable to leave their homes to purchase food
- A grocery chain charging a delivery customer a higher price for milk based on data showing that several children live in the customer’s household
- A hotel charging a higher price to a consumer based on personal data implying the consumer is traveling for a funeral or some other can’t-miss personal business
- A rideshare company charging a user more on the basis of data revealing that the user has not installed any of the company’s competitors’ apps on the user’s phone
- A rideshare company charging a user more for transport to a medical facility on the basis of data suggesting that the user has a life-threatening medical emergency or condition
- A retailer charging more for a home-security camera system based on court filings indicating a particular customer has recently been the victim of a crime
- A retailer charging more for a product sold on its website on the basis of data revealing that the consumer was browsing the retailer’s website while inside one of the retailer’s physical locations or parking lots
Critically, the FTC’s examples extend beyond the types of data regularly collected by retailers, such as browsing history and geolocation, and include the use of non-private information, such as public court filings.
Personalized Pricing Disclosures May Reduce Risk
The FTC advises retailers to provide clear and conspicuous disclosures of all relevant information, including:
- The fact that the price is personalized
- The basis of the personalization
- The type of data used
General statements that a user is “specially selected” or being presented with a “personal” price would not sufficiently inform the consumer about a retailer’s pricing practices. Instead, the FTC suggests retailers present an accurate and complete disclosure that the price advertised is an estimate of the consumer’s willingness to pay based on past purchases. Requiring such disclosures may have the effect (probably intended) of chilling the use of personalized pricing.
Although clear disclosures reduce the risk of federal enforcement, the risk of state action continues to increase as states pass personalized pricing laws. Maryland and Connecticut have enacted laws prohibiting certain surveillance pricing practices. New York currently requires retailers to present a conspicuous, all-caps pricing disclaimer, and a bill prohibiting the practice outright in New York awaits the governor’s signature. California is considering similar legislation.
Personalized Pricing Enforcement Remains Uncertain
Interested parties may submit public comments to the FTC’s draft statement through September 18, 2026. Whether the FTC ultimately issues an enforcement statement, what that says, and how it is enforced remain uncertain. Efforts to enforce such a statement will likely meet challenges under the First Amendment.
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