FTC proposal would require retailers to be transparent about personalized pricing

Companies that secretly vary prices based on how much they think individual customers will pay could face federal charges under a proposed policy released Wednesday by the Federal Trade Commission.

“When consumers see a listed price, they expect it to be (the) same price that everyone else sees, not the retailer’s estimate of how much they are willing to pay based on their personal data,” FTC Chairman Andrew Ferguson said in a statement.

The FTC has had its eye on personalized pricing for several years. In a preliminary report filed in January 2025, the agency found that grocers, clothing companies and others were using third-party companies to help them individualize online prices based on shoppers’ locations, browsing histories and other factors, including how long they left items in their virtual shopping carts.

In one hypothetical example, the FTC said a consumer profiled as a new parent might be shown higher-priced baby thermometers on the first page of their search results.

Ferguson said the FTC doesn’t have the legal authority to ban personalized pricing in all circumstances. But under the proposed policy, businesses would have to “clearly and conspicuously disclose” if they are engaging in personalized pricing and share the types of data they’re using to set those prices.

The proposed policy states that companies engaged in personalized pricing without revealing the practice and the data behind it could violate the FTC Act, which prohibits unfair or deceptive practices in the marketplace.

The FTC is seeking comment on the policy for 30 days.

Several retail trade groups didn’t comment directly on the FTC’s proposal Wednesday.

The National Retail Federation, which represents big companies like Walmart, Target and Macy’s as well as smaller stores, said retailers want to continue to offer incentives like loyalty and rewards programs, which collect personal data and provide offers tailored to individuals.

“NRF has and will continue to aggressively advocate to protect these programs that deliver timely savings and personalized offers that are relevant to each shopper’s interests,” said David French, NRF’s executive vice president of government relations.

FMI, a trade group for the U.S. grocery industry, said Wednesday it was reviewing the proposal and didn’t have immediate comment. But in a letter FMI sent to U.S. senators this month after a subcommittee hearing on personalized pricing, FMI also said it hoped to preserve shopper loyalty programs.

In the letter, FMI also noted that electronic shelf labels, which are becoming increasingly common at grocers and retailers like Walmart, don’t automatically change prices based on individual shoppers.

The Retail Industry Leaders Association, a trade group that represents Best Buy, Home Depot, Dollar General and 200 other retailers, didn’t comment on the new proposal Wednesday but cited its own letter sent to U.S. senators earlier this month.

In the letter, the association said retailers don’t use consumers’ personal data to increase prices because that would jeopardize customer loyalty.

“As shoppers demonstrate an increased willingness to seek out lower prices, competition among retailers intensifies to meet customers’ needs, creating a strong and continuous incentive for retailers to offer attractive prices, discounts and value,” the letter said.

The FTC’s action comes amid consumer unease about pricing tactics. Wendy’s faced a backlash in 2024 after it said it was considering charging more for its menu items during peak times. Uber and Lyft have also been in lawmakers’ crosshairs for their surge-pricing practices.

Several states, including Maryland, Connecticut and New Jersey, have already passed laws prohibiting personalized pricing at grocery stores. California and New York are also considering legislation that would ban personalized pricing.

New Jersey also placed a one-year moratorium on new electronic shelf labels despite retailers’ assurances that the labels aren’t used for personalized pricing and can actually help consumers by, say, automatically lowering prices for foods that are about to expire.

The consumer advocacy organization Consumer Reports said Wednesday that the FTC’s proposal was encouraging but might still require consumers to read detailed disclosures on pricing while shopping online.

The group said the FTC and Congress should instead follow the states’ lead and ban companies from using customer data to personalize prices in the first place.