The Federal Trade Commission has floated a new proposal that could lead to federal charges for companies that secretly use so-called surveillance pricing. The move would put a national regulator behind an issue that has so far been handled mainly at the state level.
Surveillance pricing is the practice of a company varying its prices based on how much the shopping data it has collected on an individual suggests that person is willing to pay. In other words, two shoppers can be shown different prices for the same product depending on the data a business holds about them.
According to the FTC, it does not have the authority to ban surveillance pricing outright in all circumstances. That legal limit has shaped the approach the commission is now taking, steering it toward transparency requirements rather than a blanket prohibition.
Instead of an outright ban, the FTC is proposing a policy that would require businesses to tell customers when they are using surveillance pricing and what data they are collecting to set those prices. The aim is to make a hidden practice visible to the people it affects.
The enforcement teeth come from the secrecy itself. Under the proposal, companies that quietly use surveillance pricing without disclosing it could face federal charges, turning a failure to be transparent into a potential violation rather than the pricing practice alone.
Some states have already moved faster than Washington on the issue. Surveillance pricing has already been banned outright in New Jersey and Connecticut, giving those states a stricter standard than the disclosure-based approach the FTC is now weighing at the federal level.
New York could soon join them. Similar legislation targeting surveillance pricing is awaiting Governor Kathy Hochul's signature, which would add another state ban even as the federal proposal charts a separate, transparency-focused path.