FTC Proposes Enforcement Policy on Personalized Pricing, Seeks Public Comment on Disclosure Rules

FTC Shifts Language from Surveillance Pricing to Personalized Pricing

The FTC announced a new enforcement policy statement on personalized pricing, marking a significant shift in how the Trump administration frames the practice compared to Biden-era terminology of surveillance pricing1

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. Chairman Andrew Ferguson stated that businesses failing to disclose how personal data sets prices may violate the FTC Act and other laws1

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. The policy targets what critics call surveillance pricing: using consumer behavior, circumstances, or characteristics to estimate the highest price someone might pay2

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. This linguistic shift has already influenced media coverage, with outlets like CBS News and PBS adopting the FTC's preferred "personalized pricing" terminology after previously using surveillance pricing1

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FTC Enforcement Policy Requires Transparency and Disclosure

The FTC approved the proposed policy by a 2-0 vote and opened a 30-day public comment period for stakeholder input2

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. Ferguson emphasized that consumers expect listed prices to be uniform, not tailored estimates based on their personal data2

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. The FTC lacks authority to ban personalized pricing outright, but can pursue enforcement when sellers misrepresent prices as static while secretly personalizing them2

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. Companies engaging in undisclosed personalized pricing must now "clearly and conspicuously" disclose both that they use this practice and what consumer data influences pricing decisions3

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. Businesses must also obtain consent to collect data for price-setting purposes2

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AI-Driven Pricing Raises Consumer Protection Concerns

AI-driven dynamic pricing uses machine learning to estimate price elasticity and create demand curves for individual products, making algorithmic pricing far more sophisticated than traditional models3

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. Companies like Instacart faced criticism in 2025 for charging some customers nearly 25% more for identical items, while Delta and other airlines drew scrutiny for AI-driven pricing strategies1

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. The FTC illustrated concerns with examples including delivery platforms raising prices when customers cannot leave home, or rideshare services increasing fares after detecting no competing apps installed on phones2

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. Existing research suggests increasingly sophisticated personalization generally increases corporate profits while making consumer benefits less likely, according to the proposed statement2

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Bipartisan Opposition and Legislative Action

Surveillance pricing has generated surprisingly bipartisan backlash, demonstrated at a Senate Judiciary Committee hearing titled "Your Data, Their Profit: the Consumer Cost of AI Surveillance Pricing"1

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. Senator Josh Hawley called AI surveillance pricing "the unholy trinity of everything Americans hate: spying on people, ripping them off, and taking away jobs"1

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. Congress is considering the Stop AI Price Gouging and Wage Fixing Act, which would restrict certain algorithmic pricing practices while protecting publicly disclosed group discounts and voluntary loyalty programs2

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. New Jersey enacted the Fair Price Protection Act in July, restricting grocery stores and delivery platforms from using browsing activity, location, purchasing history, and inferred demographics for surveillance pricing2

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Consumer Advocacy Groups Demand Stronger Protections

Consumer Reports criticized the FTC enforcement policy for not going far enough, arguing it should not be consumers' responsibility to read detailed disclosures while shopping online1

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. The organization called for the FTC, Congress, and states to prohibit companies from using personal data for price discrimination in the first place1

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. Public comment submissions have been overwhelmingly hostile, describing personalized pricing as "abhorrent," "atrocious," and discriminatory2

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. Commenters warned that hidden algorithms could impose greatest burdens on low-income consumers, seniors, young people, and those with limited technical knowledge, urging the FTC to prevent use of race, sex, religion, and sexual orientation in pricing2

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Global Implications and Dark Patterns in E-Commerce

The FTC's action carries significance beyond US borders, particularly for markets like India where e-commerce and quick-commerce platforms engage in dark patterns and adjust platform fees without disclosure4

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. In September, India's Central Consumer Protection Authority fined FirstCry for drip pricing, a dark pattern under CCPA Dark Pattern Guidelines 20234

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. Only 31 e-commerce and quick-commerce platforms currently comply with India's dark pattern guidelines according to Consumer Affairs Ministry data4

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. Legacy FMCG companies like Hindustan Unilever and Marico are designing price packs exclusively for quick-commerce, with executives noting this channel allows consumer segmentation and targets less price-sensitive shoppers seeking convenience4

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. While India lacks dedicated legislation on personalized pricing, companies could face scrutiny under Consumer Protection Act provisions if they vary prices based on purchase history, location, or device type without consent or adequate disclosure4

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