The Federal Trade Commission (FTC) has issued a formal demand to nine major US companies, including Delta Air Lines, Uber, and Walmart, requiring them to explain how they use algorithms to set prices for consumers and wages for workers. The inquiry targets firms that have faced allegations of charging different rates to different customers based on their personal data and purchase histories.
Scope of the FTC Investigation
The nine companies named in the inquiry are Delta, United Airlines, JetBlue, Lyft, Uber, DoorDash, Instacart, Target, and Walmart. The regulator stated it would scrutinize the “opaque methodology” used by these industries to determine costs for shoppers and pay for gig economy workers. Chair Andrew Ferguson said the agency aims to assess whether pricing varies based on factors such as loyalty program participation or the analysis of personal data by advanced algorithms.
The FTC is tasked with policing unfair or deceptive business practices. However, its authority does not extend to the airline industry, meaning it cannot impose fines or regulations on the carriers named in the probe. Despite this limitation, the commission has joined with state attorneys general in other instances to pursue legal action against companies for deceptive practices.
Impact on Consumers and Workers
Regulators argue that US families are already burdened by inflation and are being further squeezed by what they describe as deceptive store pricing practices. The FTC cited concerns over “surveillance pricing,” a practice where companies use precise location data or browser history to target individual consumers with different prices for the same goods. The agency also noted that gig workers may receive different fares based on their personal histories.
Several states have begun introducing legislation to ban surveillance pricing and electronic shelf labels that could be used to set dynamic prices based on shopper habits. The current probe follows a July 2024 inquiry by the Biden administration into surveillance pricing products offered by firms like McKinsey and JPMorgan Chase. In January 2025, the FTC found that details like a person’s precise location or browser history are frequently used to target individual consumers.
Whether this inquiry will result in substantial changes to consumer laws or company practices remains unclear. Rohit Chopra, a former FTC commissioner who now heads California’s Business and Consumer Protection Agency, noted that previous studies have not led to meaningful rule-making changes. He stated that companies have not been using studies that produce reports leading to actual regulatory shifts.
Source: The Guardian
