FTC Launches Personalized Pricing and Compensation Inquiry

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.

“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,” said FTC Chairman Andrew N. Ferguson. “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.

The Commission issued a study on personalized pricing in mid-2024 and released staff findings days before President Donald J. Trump took office. But that study examined only middlemen consultancies rather than the businesses that actually set prices for services and products offered to consumers. The agency learned nothing about actual pricing decisions from the 2024 study. This study corrects the Commission’s mistaken 2024 approach and demands information directly from companies who may be engaging in personalized pricing, rather than middlemen.

In August, the Commission invited public comment on a proposed enforcement policy statement describing how the undisclosed use of personal information to set a price unique to a consumer could violate the FTC Act.

Under President Donald J. Trump’s leadership, businesses that mislead consumers with hidden fees and surprise charges have faced Commission action. The FTC has similarly gone after businesses that deceive American workers with false earnings claims as part of its Labor Task Force.

The recipients will have 45 days from the date they receive the orders to respond. Under Section 6(b) of the FTC Act, the Commission has authority to conduct wide-ranging studies that do not have a specific law enforcement purpose.

The Commission vote to approve issuing the special orders was 2-0.