The US Federal Trade Commission (FTC) has ordered retailers Walmart and Target, as well as seven transport and delivery businesses, to provide information on individualized consumer pricing and variable worker pay.
Under Section 6(b) of the FTC Act, the orders direct nine major companies to disclose their use of consumer data in pricing: retailers Walmart and Target; airlines Delta, United, and JetBlue; ride-hailing firms Lyft and Uber; and delivery services DoorDash and Instacart. The regulator is seeking information on whether prices for goods, tickets, ride shares, and deliveries differ between individuals because of loyalty program participation or algorithmic analysis of personal data.
Companies have 45 days from receiving the orders to respond. The FTC may seek to compel compliance in federal court if requested documentation is not provided. The orders also cover variable compensation at ride-sharing and food-delivery businesses, with the FTC seeking documents on the inputs, algorithms, and procedures used to determine changing worker pay.
FTC Chairman Andrew N. Ferguson said, “We intend to scrutinize the opaque methodology that some companies in these industries may be using to determine how much consumers pay or how much gig workers are paid for the same product or service. 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 action replaces a mid-2024 study that examined third-party intermediaries and consultancies rather than the businesses setting consumer prices. The FTC voted 2-0 to approve the direct special orders, following an August request for public comment on a proposed enforcement policy statement concerning the undisclosed use of personal data in pricing.
The inquiry focuses on whether companies use personal data to establish unique consumer prices and variable worker pay. The involved firms must provide detailed documentation on their pricing and compensation methodologies, including the use of algorithms and worker behavior metrics.
