Your browsing history can determine how much you pay for purchases: 9 companies under US FTC privacy watch

The US Federal Trade Commission (FTC) has ordered nine major companies, including airlines, passenger platforms, food delivery companies and retailers, to provide detailed information on how they use personal data to set prices and compensate employees.

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

Orders have been issued to Delta Air Lines, United Airlines, JetBlue, Lyft, Uber, DoorDash, Instacart, Target and Walmart. The companies have 45 days to respond after receiving the order.

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

“Consumers deserve to know whether companies use their web browsing habits or other personal data to estimate the highest price they can charge each consumer. Workers also deserve to know whether their compensation is affected by how companies use their personal data,” he added.

Can companies charge different prices based on personal information?

The FTC’s investigation will examine whether the prices of flights, rides, food deliveries, and other products or services differ between individuals based on their personal information or participation in loyalty programs.

The agency will also focus on the role of advanced algorithms in pricing decisions, including whether companies analyze customer data to determine how much an individual might be willing to pay.

Personalized 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 find out what data the companies collect, what tools they use to analyze it, and how that information affects pricing decisions.

The investigation found no evidence that any of the nine companies engaged in illegal pricing practices. Instead, the FTC seeks information to understand how their pricing systems work.

The salaries of Gig employees are also under scrutiny

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

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

According to the FTC, such compensation decisions could depend on factors including how employees use the phone and how they have accepted or declined previous offers in the past.

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

The agency said workers deserve more transparency about whether their personal information affects how much they are offered to complete the same job.

Companies have 45 days to respond

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

The FTC issued orders pursuant to Section 6(a) (b) of the FTC Act, which allows the commission to conduct large-scale investigations of business practices even if the investigation is not related to a specific law enforcement action.

The commission said it could try to compel compliance through federal court if the company doesn’t provide the requested information.

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

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