WORLDTECHFTC Launches Personalized Pricing and Compensation Inquiry
What happened
The Commission issued a study on personalized pricing in mid-2024 and released staff findings days before President Donald J. Commission orders seek pricing and compensation methodology from major airlines, ride-sharing companies and food-delivery firms The Federal Trade Commission today ordered nine major airlines, ride-sharing companies and food-delivery firms to provide detailed information that will allow the agency to study the use of personal data to set prices and compensation.
“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. Workers also deserve to know if their compensation is affected by how companies use their personal data.” The orders were issued to Delta, United, JetBlue, Lyft, Uber, DoorDash, Instacart, Target and Walmart under Section 6(b) of the FTC Act.
Each company must turn over information that 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. If a company fails to turn over the required information, the Commission has the power to compel compliance in federal court.
While airlines typically pay employees a transparent salary or fixed hourly wages, ride-sharing and food-delivery companies may pay their workers shifting compensation offers based on opaque formulas. These companies may engage in personalized compensation based on their drivers’ personal data, such as their phone usage or acceptance history for past offers.
The orders ask these companies to document the inputs, tools and procedures used to adjust or set compensation and pricing. But that study examined only middlemen consultancies rather than the businesses that actually set prices for services and products offered to consumers.