More companies are using artificial intelligence to collect data on consumers and then using that data to determine how much to charge them for products. Now the Federal Trade Commission has a warning: so-called “personalized pricing” may be illegal.
In a proposed enforcement policy statement, the FTC said companies must offer “clear and conspicuous” disclosure of any personalized pricing. The agency says that includes the types of data they use to come up with such offers.
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While the FTC acknowledges that it does not have the authority to ban companies from personalized pricing practices, it says it will “deploy enforcement resources” if it finds that a company violates its disclosure rules.
The FTC is seeking public comment on the proposal.
What is personalized pricing?
Fear No Fact.
More than 250 companies use or supply data-driven personalized pricing systems, according to the FTC.
Personalized pricing is exactly what its name implies. It’s when companies use your personal data to tailor their prices to what they have determined you would be willing to pay. The practice is also commonly referred to as “surveillance pricing.”
Personalized pricing is different from dynamic pricing, in which prices are based on factors such as supply and demand, time of day and the season. Airlines, for example, commonly engage in dynamic pricing.
In its proposal, the FTC said consumers expect prices for products and services to apply uniformly to all customers. But under personalized structures, prices vary by consumer based on their online browsing habits and purchase history, among other factors.
“When consumers walk into a retail store, for example, they reasonably expect the price on the shelf to be the same price offered to any other consumer shopping at the same store at the same time,” the FTC said in its statement. “Likewise, when they browse to a product listing on a retailer’s website, they reasonably expect the price to be the same price that anyone else browsing to that listing would see, not a price set based on the retailer’s analysis of their personal data and conclusion as to how much they would be willing to pay for that product as compared to some other consumer.”
Legislative efforts
The FTC isn’t alone in trying to put a stop to the practice. Earlier this month, after a Senate Judiciary Committee subcommittee held a hearing on surveillance pricing, senators from both sides of the aisle agreed that Congress should act to stop companies from using people’s personal data to individualize prices.
Last year, a group of Democratic senators introduced the “One Fair Price Act,” aimed at making it illegal “to offer or charge different prices to different consumers for the same, or a substantially similar, product or service using, informed by, or based on, in whole or in part, surveillance data.”
The bill has languished in a committee for months.
Meanwhile, multiple states have enacted or are working on laws cracking down on surveillance pricing.
Last month, New Jersey Gov. Mikie Sherrill signed a law prohibiting businesses from using shoppers’ personal information to charge different prices for identical products. New Jersey became the third state to ban the practice, alongside Maryland and Connecticut.
At least 40 bills have been introduced across 24 states to regulate personalized algorithmic pricing in 2026 alone, according to the Covington Law Firm.
Are they ways to protect myself from personalized pricing?
There are no foolproof ways for consumers to protect themselves. But there are steps to mitigate the sharing of personal data, including:
- Comparing prices across multiple devices before making a purchase.
- Using incognito or private browsing mode to make it harder for websites to recognize a returning user.
- Using aggregator sites like Google Flights or TripAdvisor before going directly to a company’s website to make a purchase.
- Using a VPN, which hides a user’s location.
Experts caution, though, that hiding your digital footprint could cause you to end up paying more instead of less, according to The Wall Street Journal.
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