FTC to probe major companies over personalized pricing and pay

The Federal Trade Commission (FTC) on Wednesday ordered nine food delivery, airline, ride-sharing and retail companies to turn over detailed information on how they harness personal data to set individual consumer prices and employee compensation.

Orders were sent to JetBlue, Delta, United, Lyft, Uber, DoorDash, Instacart, Walmart and Target, the agency said. If the companies don’t respond, the agency can force them to comply in federal court.

The information will allow the agency to “assess whether the pricing for a ticket, ride share, food delivery or other product or service varies from one person to the next based on factors such as participation in loyalty programs or analysis of personal data by superintelligence algorithms,” the FTC said. 

The companies employing gig workers also must give the agency the “inputs, tools and procedures” they deploy to tweak individual workers’ compensation and customer pricing based on personal data and unique characteristics, the agency said.

FTC officials plan to scrutinize the “opaque methodology” firms could be using to decide what to charge customers or pay individual gig workers, agency chair Andrew Ferguson said in a press release.

Consumers deserve to know if firms exploit their online browsing or other personal data to determine the highest price they think a given customer is willing to pay and the lowest price they think an individual worker will accept, he said.

Ride-share and food-delivery companies may compensate workers on a shifting basis using murky formulas that exploit drivers’ personal data, including phone usage and payments they have historically agreed to, the press release said.

The nine firms have 45 days to respond to the orders. The FTC Act allows the agency to compel industry to turn over information for studies that do not have a specific law enforcement purpose.

The FTC probe follows an order in July 2024 to eight companies seeking information about how they facilitated the alleged surveillance of consumers by third-party companies to create different pricing for the same products or services based on personal data. 

Days before leaving her position in January 2025, outgoing chair Lina Khan released preliminary findings, which were drawn from information provided by McKinsey & Co., Accenture, Revionics and five other firms. 

Ferguson subsequently objected to the Khan release, announced he was closing the probe and said he would not divulge the full findings. 

The prior study was shut down because it was based on information from “middlemen consultancies,” according to Wednesday’s press release. 

“The agency learned nothing about actual pricing decisions from the 2024 study,” it said. “This study corrects the commission’s mistaken 2024 approach and demands information directly from companies who may be engaging in personalized pricing, rather than middlemen.”

The eight previously queried “middleman consultancies” allegedly sold surveillance pricing tools to businesses as opposed to setting algorithm-driven pricing themselves.

In August, the FTC asked the public to comment on a proposed enforcement policy statement describing how the setting of prices based on the undisclosed use of consumers’ singular personal data may be unlawful under the FTC Act.