The Federal Trade Commission today announced it is seeking public comment on an enforcement policy statement regarding personalized pricing, which is the use of personal data to set prices according to the amount that a company believes an individual consumer is willing to spend.
“When consumers see a listed price, they expect it to be same price that everyone else sees, not the retailer’s estimate of how much they are willing to pay based on their personal data,” said FTC Chairman Andrew Ferguson. “The FTC does not have the legal authority to ban personalized pricing in all circumstances, but businesses that fail to tell consumers how their personal data is being used to set a price may be in violation of the FTC Act and other laws we enforce. We are seeking public input on this draft statement, which would put businesses engaged in or considering personalized pricing on notice that the Trump-Vance FTC will not hesitate to enforce the law in this space.”
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There’s nothing wrong with personalized pricing. It’s not even that different than the current situation.
What typically happens now is business identify which demographic group makes up their customer base and price to them. The difference is that regular buyers get completely priced out because they aren’t willing to pay what the target demo is.
I don't think banning personalized pricing is very practical to enforce.
That being said, I don't really want society to move in the direction of greater complexity. I'd be pretty happy if things had one sticker price, not dependent on anything, and I could just choose to take the price or not.
Complexity, in general, is pretty regressive, tending to hurt the poor in favor of the already rich.
The situation is still that you see one price and choose to take it or leave it (except that some people will undoubtedly figure out how to access the lower prices).
I think the classical expectation here would be that poor people would keep paying low prices and rich people would see the higher prices, to the extent that willingness to pay corresponds to budgets.
What I’m thinking about is the possibility that some products that are protected from competition by IP monopolies may mostly change in the direction of lower prices to poor/cheap consumers.
Obviously the benefits will mostly accrue to the wealthy by swapping consumer surpluses for producer surpluses.
Right but I think part of my point is that the classical expectation might not be accurate. There are plenty of products where the poor end up subsidizing the rich for whatever reason, like credit cards. It's not obvious to me that poor peoples' demand curves (for the things they actually buy) are more elastic than the rich, as they may have less time or ability to shop around for the best deals or otherwise optimize their way around the system
That’s also part of my point.
Yeah, there could be some interesting Giffin type dynamics, too, in cases where poor people are budget constrained into buying particular goods.