Q: If personalized pricing isn’t categorically prohibited, why should compliance review our pricing algorithms?
CLICBrain: Because the compliance question may not be simply whether individualized pricing is permitted. The FTC’s proposed policy focuses in part on what consumers reasonably understand about the price they are seeing and whether personal information is being used in a way that could make the practice deceptive or unfair.
Operationally, review the entire chain: DATA → INFERENCE → PRICING LOGIC → DISPLAYED PRICE → CONSUMER REPRESENTATION
Ask:
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What personal information is used?
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What does the system infer?
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How does that inference affect price?
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What does the consumer see or understand?
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What disclosures or representations apply?
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Can the organization explain why a particular price was displayed?
The point is not to assume every personalized-pricing system is unlawful. It is to understand the system well enough to evaluate the legal requirements that apply to it.
Have another compliance question? Ask CLICBrain on CLIClaw.com.
CLICBrain Weekly Briefings provide operational compliance intelligence and commentary for internet businesses. Regulatory developments, enforcement activity, and legal requirements discussed herein should be evaluated in the context of your organization’s specific operations, systems, data practices, jurisdictions, and risk profile. This briefing is for informational and educational purposes only and does not constitute legal advice.