WASHINGTON — Federal regulators on Wednesday ordered nine major retail, travel and gig-economy corporations to turn over detailed internal records on whether and how they use consumer information to tailor prices, wages and job offers to individuals.
The Federal Trade Commission sent formal demands to retail giants Walmart and Target, app-based ride-hailing and delivery services Uber, Lyft, DoorDash and Instacart, and major carriers Delta Air Lines, United Airlines and JetBlue, according to senior agency officials and commission records cited by Reuters and Business Insider.
The orders require companies to disclose their pricing methodologies dating back to Jan. 1, 2023, including the role of artificial intelligence, experimental A/B testing and algorithmic technology. The agency is probing whether businesses examine personal variables such as geographical location, online browsing history and income levels to estimate the maximum sum a customer is willing to spend.
“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,” FTC Chairman Andrew N. Ferguson said in a statement reported by Business Insider. “Workers also deserve to know if their compensation is affected by how companies use their personal data.”
Regulators scrutinize automated pricing systems
The agency inquiry comes ahead of next week’s U.S. congressional elections, where voters have repeatedly cited living costs as a top concern. Because personalized pricing serves different rates to different consumers simultaneously, regulators have found the practice difficult to examine from the outside.
The FTC intends to publish a formal study based on the collected records to guide lawmakers and antitrust regulators. Although hundreds of public comments urged the FTC to enact an outright ban on personalized pricing, the agency previously stated it lacks statutory authority to institute a blanket prohibition. However, Ferguson warned that tailoring charges to individual customers without their expectation could violate consumer protection statutes and prompt enforcement actions.
Efforts to restrict personalized prices and algorithmic compensation have also gained traction in several state legislatures. The National Retail Federation has pushed back against statutory bans, defending data-supported discounts as a standard way to reward loyal shoppers, CNBC reported.
Airlines and delivery platforms push back
Several corporations named in the probe quickly denied employing personal consumer profiles to determine what customers pay.
- Delta told reporters the airline has never deployed or tested products that generate individualized offers using personal data, adding that it enforces strict compliance with pricing and advertising laws.
- JetBlue stated that it relies strictly on seat availability and travel demand rather than web history or personal background, keeping fares consistent across its website and app.
- Instacart said in a statement that it does not utilize personal records to determine consumer costs and pledged never to adopt the practice.
Walmart and Target have previously pledged transparency surrounding their store pricing as digital shelf tags become widespread. In the gig economy, companies such as Uber calculate driver earnings based on fluctuating market demand rather than standard per-mile or per-minute pay structures.
What remains to be seen is how quickly the nine corporations will comply with the federal orders and whether the commission’s planned findings will spur formal administrative lawsuits or federal legislation.
