FTC Urges Continued Research Into ‘Surveillance Pricing’

Days before the inauguration of President-elect Donald Trump, the Federal Trade Commission (FTC) released early findings from its ongoing study of what it calls “surveillance pricing” and said this research should continue.

Pointing to initial staff findings from research on this issue, the FTC said in a Friday (Jan. 17) press release that examples of surveillance pricing include retailers’ use of things like a person’s location, demographics, shopping history, browsing patterns or mouse movements on a web page to set “targeted, tailored” prices.

“The FTC should continue to investigate surveillance pricing practices because Americans deserve to know how their private data is being used to set the prices they pay and whether firms are charging different people different prices for the same good or service,” FTC Chair Lina M. Khan said in the release.

Together with the press release, the FTC issued a request for information, a blog post, an issue spotlight and research summaries focused on surveillance pricing.

The request for information asks consumers about their experiences with surveillance pricing, and asks businesses if surveillance pricing tools can give competitors an unfair advantage and if surveillance pricing has been used to determine the compensation for gig workers or employees.

In the blog post, FTC Chief Technologist Stephanie T. Nguyen and Director of the FTC’s Bureau of Consumer Protection Samuel A.A. Levine wrote: “Today, as relatively nascent surveillance pricing practices evolve, it will be critical to lay out clear principles that guide future developments and enforcement in the space.”

The commission voted 3-2 to allow staff to issue the research summaries. The two commissioners who opposed the move said in a dissenting statement that releasing “initial observations” from research that is in its early stages is an unprecedented move and that FTC studies should not be released until they are complete.

The FTC said in July that it was looking into surveillance pricing when it sent orders seeking information from eight firms that advertise their use of technology and data to set target prices for individual consumers.

The commission said at the time that it sent the orders using its 6(b) authority, which allows it to conduct wide-ranging studies that do not have a specific law enforcement purpose.