FTC proposes policy statement signaling increased scrutiny of personalized pricing

Key takeaways 

• Amid the rapid adoption of state laws addressing so-called “personalized” or “surveillance” pricing, the Federal Trade Commission has proposed an enforcement policy statement that takes the position that businesses that use consumers’ personal data to vary prices without an adequate disclosure may engage in a deceptive or unfair practice under Section 5 of the FTC Act.  
• The FTC says that to avoid liability, businesses must clearly and conspicuously disclose all relevant information, including the fact a price is personalized, the basis of the personalization, and the type of data used.  
• The FTC is seeking public input on its policy statement; once the policy statement is published in the Federal Register, the public will have 30 days to comment.  

On August 19, 2026, the Federal Trade Commission announced that it is seeking public comment on a Proposed Enforcement Policy Statement Regarding Personalized Pricing. The FTC acknowledges that it lacks authority to prohibit personalized pricing—often referred to as "surveillance pricing"—in all circumstances. However, the proposed statement provides that a business "likely" engages in a deceptive or unfair practice under Section 5 of the FTC Act when it varies prices for a product or service based on a consumer's personal data without clearly disclosing that it is doing so, where consumers reasonably expect that the price will not change based on their personal data. The FTC signals that personalized pricing is a Commission priority, noting that it intends to enforce Section 5 "aggressively" against any deceptive or unfair personalized pricing practices. 

FTC’s proposed framework on personalized pricing 

In its proposed policy statement, the FTC describes “personalized pricing” as using “modern data collection and processing capabilities” to set pricing for individual consumers “based on analysis of consumers’ personal data and resulting conclusions, such as estimates of how much an individual consumer is willing to pay for a product or whether that consumer is likely to engage in comparison shopping.” The FTC explains its view that consumers reasonably expect that displayed prices, both in brick-and-mortar stores and online, will be the same for everyone and not set using their personal data. According to the FTC, this expectation of nonpersonalized pricing factors into consumer decisions about where and how they shop. The agency distinguishes personalized pricing from price variation driven by changes in supply and demand that affect everyone in the same market (such as rideshare surge pricing); regional differences in taxes, regulations, and market conditions; and pricing based on individualized characteristics used to price risk-based products such as insurance and credit.  

The FTC explains its concern with personalized pricing as driven largely by a lack of transparency—that consumers reasonably do not expect that their personal data is being used to set a price specific to them nor do they necessarily understand how the underlying data used to generate a personalized price may have been collected, stored, sold, and used. The FTC also suggests, based on what it characterizes as the “limited” economic research on the issue, that businesses are more likely to use the practice overall to raise prices than to lower them. The FTC illustrates its concerns with a series of hypotheticals, including a food delivery service charging more to a consumer whose data suggests they are less likely or unable to leave their home, a grocery chain charging a delivery customer more for milk based on data showing several children in the customer’s household, a hotel charging more to a traveler whose data indicates they are traveling for a funeral, and a rideshare app charging more to a consumer who has not installed a competitor’s app or for transport to a medical facility based on data suggesting the user has a life-threatening medical emergency. Each example pairs a price increase with an inference drawn from personal data—often sensitive—the consumer did not know was being used to set their price. 

Conduct that could be deceptive or unfair

The FTC highlights three circumstances where personalized pricing may be deceptive: (1) stating or suggesting that a price is static or widely offered; (2) failing to disclose that a price is personalized when consumers reasonably believe that a price is static or widely offered; and (3) misleading consumers about the basis or impact of personalization—for example, where consumers think a price is based on their purchase history with the retailer when it is actually based on information about their disposable income or shopping habits with other businesses or where they are led to believe a personalized price is a discount when it is in fact a higher price.  

According to the FTC, it may be unfair if consumers pay a higher price as a result of a concealed use of personalized pricing. The FTC also leaves open the door to the possibility that personalized pricing may be unfair in some circumstances even with adequate disclosures. Further, the FTC explains that the data practices associated with personalized pricing can also violate Section 5 if using consumer data that a business collected, used, or disclosed without adequate disclosures or obtaining consent from the consumer or verifying that upstream collection of the data was done without such consent. 

Required disclosures 

To avoid liability, the FTC urges businesses using personalized pricing to clearly and conspicuously disclose all relevant information, such as (1) that the price is personalized, (2) the basis for the personalization, and (3) the type of data used. According to the FTC, a disclosure that a consumer has received a “specially selected” price would likely be misleading because it “omits important information.” By contrast, disclosing that a price is based on the consumer’s estimated willingness to pay, derived from data about the consumer’s prior purchases from the same retailer, would likely be enough to dispel a reasonable expectation of uniform pricing, provided the disclosure is accurate and complete. 

Notably, the FTC suggests it is concerned with personalized pricing when used to raise the price a consumer pays but it does not discuss uses of personal data to provide legitimate discounts, such as discounts from loyalty programs or bona fide discounts provided to large groups of consumers—such as military veterans, seniors, or teachers—which are carved out of a number of state laws. 

Recent FTC and state activity on personalized pricing 

This is not the FTC’s first foray into personalized pricing. In July 2024, the FTC announced an industry study into the consumer protection, privacy, and competition issues raised by algorithmic pricing. That study of the practices of eight companies that offer services related to personalized pricing culminated in preliminary staff research summaries on the topic, released on January 17, 2025, which described how intermediaries enable retailers to use consumers’ personal information to set tailored prices for goods and services and identified risks from the practice of personalized pricing in a staff “issue spotlight” on surveillance pricing. Then-Commissioner Andrew Ferguson had voted in favor of the launch of the study, noting that “consumers may well see personalized pricing as unfair or even manipulative, and it may undermine their trust in the digital marketplace,” whether or not the practice was unlawful. However, he objected to the early release of preliminary staff findings and analysis at the tail end of the Biden administration and, as chairman, he ended the public comment period on the issue early. More recently, under Chairman Ferguson’s leadership, the FTC has resumed its work on the issue, including by posing questions on the topic in launching a rulemaking on pricing practices by the food delivery industry in April of this year. 

State legislation and enforcement activity 

The FTC’s policy statement also comes against the backdrop of heavy recent state legislative and enforcement activity on personalized pricing. Just in 2026, state legislatures have approved the following consumer protection legislation on personalized pricing (in addition to measures addressing the practice from an antitrust perspective):  

• Connecticut: A new Connecticut law (House Bill 5563), signed by Governor Ned Lamont in June 2026, restricts retail sellers and delivery services from engaging in “surveillance pricing,” with carve-outs for retention offers and offers sent to promotional mailing lists, among others. Any other business using an automated price-setting device that relies on personal data to increase a price for a consumer good or service in an online transaction must display a clear notice stating: “THIS PRICE WAS INCREASED BY A PRICE SETTING DEVICE USING YOUR PERSONAL DATA.” The law takes effect on July 1, 2027. 
• Maryland: The Protection from Predatory Pricing Act (House Bill 895), signed by Governor Wes Moore on April 28, 2026, prohibits covered food retailers and food delivery services from using personal data to set prices for consumers, with carve-outs for promotional pricing and loyalty programs, among others. The law takes effect on October 1, 2026. 
• New Jersey: The Fair Price Protection Act (A4523), signed by Governor Mikie Sherrill on July 23, 2026, prohibits the use of surveillance pricing or another pricing strategy to determine or vary the price of “groceries and other foodstuffs” based in whole or in part on personal data (with exceptions for reasonable cost differences, publicly disclosed bona fide group discounts, and qualifying loyalty programs). The law takes effect on August 1, 2027.  
• New York: Under the Algorithmic Pricing Disclosure Act, enacted in 2025, businesses that use personal data to set individualized prices must display a clear notice that “THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA.” The One Fair Price Act, which the New York Legislature passed in June 2026, would replace that disclosure regime with a prohibition on surveillance pricing. Governor Kathy Hochul has not publicly commented on whether she intends to sign the bill. (See our prior Legal Development on the One Fair Price Act here).

Implications for businesses 

The FTC’s proposal signals that disclosure, rather than prohibition, is likely to be the federal baseline to apply to most personalized pricing practices absent action by Congress, as well as its strong interest in the issue. Businesses and other interested parties have 30 days following publication of the FTC’s policy statement in the Federal Register to submit comments to the FTC. While the FTC’s reaction to public comments may help clarify the contours of this baseline, businesses that price goods or services for consumers should begin reviewing their pricing practices. That review should cover whether pricing models use personal data in ways that could require disclosure under the FTC’s proposal or be subject to a state law. Businesses with a stake in how the FTC frames these issues may also wish to submit comments before the deadline. The scrutiny on this issue is still heating up, and we expect additional states to take up similar legislation in 2027.