CFJ Urges FTC to Protect Personalized Discounts and Consumer Choice
The Committee for Justice has filed comments urging the Federal Trade Commission to withdraw or substantially revise its proposed enforcement policy statement on personalized pricing. The FTC should pursue genuine deception. It should not presume that offering two customers different prices is itself a consumer injury—or create a general duty to explain how every price was set.
Prices Are Discovered, Not Assigned
A seller does not know in advance the one “correct” price for every buyer. Consumers differ in what they value, what alternatives they have, and whether they will buy at a particular price. Sellers test offers and learn from purchases and refusals. Personalized pricing, whether through a coupon, a retention offer, or a data-informed promotion, can be part of that discovery process.
That does not mean every personalized price benefits consumers. It means the FTC must examine what actually happened and what would likely have happened without the practice.
The Discount That Makes a Sale Possible
Suppose a service is offered at $10, but a prospective customer values it at $8 and declines to buy. A targeted $3 discount lets that customer purchase it for $7. If the sale covers the seller’s costs, both parties gain and output expands. Requiring the seller to offer $7 to everyone may not be a viable alternative; the more likely result could be that the second customer receives no offer at all.
Research on personalized pricing finds mixed effects, including cases in which consumer surplus falls. That is a reason for careful, case-specific analysis—not for assuming that every price difference helps or harms consumers.
Enforce Against Lies, Not Ordinary Price Search
A business that falsely promises the same price to everyone, invents a discount, or breaks a material promise about data use should face scrutiny under existing law. But silence about a pricing method is not automatically a misleading claim. Nor does one customer’s lower price establish that another suffered substantial injury.
CFJ asks the FTC to apply Section 5’s requirements to the facts of each case, including the benefits of discounts, additional sales, and competition that a restrictive policy might prevent.
The Public Choice Risk
Broad, uncertain disclosure duties can also change who competes. Established firms may be able to absorb legal review and compliance costs that smaller rivals cannot. Competitors may welcome rules that make a rival’s targeted offers harder to use. Those are institutional risks, not allegations about anyone’s motives—and they deserve attention when the FTC weighs the proposal’s likely effects.
The Bottom Line
The FTC should protect bona fide personalized discounts, require proof of actual deception or unfair injury, and tailor any disclosure to a demonstrated misleading impression. It can enforce the law without treating price experimentation as presumptively suspect.
