FTC questions companies over personalized pricing

What if you're paying more for groceries, airfare, or a ride share just because of what a company knows about you? The Federal Trade Commission is questioning nine companies, including Walmart, Delta, DoorDash, and Uber. Regulators want to know whether your shopping habits, location, or personal data could be used to charge you more than someone else for the exact same thing. Business analyst Mark Lee joins us now to break down this technology, how it works, and what we can do about it. Mark, it's always good to see you. Thanks for joining us. Good to see you. Thank you. So let's talk about this. You have companies out there that are saying, all right, Mark does well. He shops at these places. He flies this often. So let's go ahead and charge him a little bit more. Is that fair? I don't know if it's fair, but let me just say it this way. Let's start at the very basics from a pricing standpoint. So pricing is based on supply and demand. And everybody's charged the same price based on the information that you have, just based on supply and demand. What's happening right now is that now we have technology, right? So they've collected all this information, one of you, through technology. Now the companies are starting to use AI. And based on your purchasing habits, they can charge you a certain price. And I think the frustrating part about that is a lot of people don't think it's fair because why are you charging a different price based on my purchasing habits? Versus somebody else. So the question is, is that fair or not? And consumers want information. They want to know what the heck are you charging me for? So what are the feds going to do likely about this, the Federal Trade Commission? I think what the FCC is going to do is they're trying to get more information, not investigating. What they're simply doing is asking questions. And they want to know, okay, you've got this information, how are you using the information? And I think from there, once they get those questions answered, they're gonna make a determination in terms of how they should proceed. But I mean, it seems someone could say it's discriminatory, it's not right, it's unfair. I mean, how is this even possible in the first place, in your mind, from a business standpoint? From a business standpoint, I understand what the companies are trying to do. They've collected information on you. And so based on the information they've collected. On you, they're trying to figure out if we could promote a specific product and or service and then charge you with a specific price point. In other words, we're not going to charge the same price to everybody. So from a targeting perspective, from a business perspective, it makes sense. The issue is that consumers are feeling like you're jumping into my private information. And so, therefore, how is that information being used? But from a business standpoint, Point, it does make sense with charging purposes. What can someone do to try to protect themselves from this type of pricing? Well, you gotta do this, you gotta shop, okay? Whatever the price, if you put something online right now. Make sure you still shop around and don't just assume that that is the final price. Number two, you still can negotiate. People forget you still can negotiate your different price points. And a lot of times we're given a price point. We just assume that's the way it is. So I encourage people to go ahead and negotiate if at all possible. But more importantly, shop around. Don't just take that first price and go for it. You know, it's interesting, though, because you see certain places like if you fly out of one city for Delta, it's more expensive than if you fly out from another city. What gives? Why is that? It's based on supply and demand. So if you're flying out of Detroit, it's a major hub for Delta. For example, if you're flying out of Atlanta, for example, as well, two major hubs. And so a lot of people will fly through Metro, they will fly through Atlanta. And so there could be certainly higher price points going into those cities. And by the way, you have direct flights going from Detroit and Atlanta to other cities across the country. So that can also impact the prices that you pay. How much does the price vary when you say, Mark, we will get charged one thing for an air ticket, I get charged something else? If we're both flying out of Detroit. Could it vary between you and me, and does it vary a lot? It could vary. It could be if you're a loyalty program, Remember, they've got all this information on you, so they could charge you a certain price. They could charge you a different price. What's price differential? I don't know what that specific price differential could be, but the point is they can charge you two different price points. Yeah, well, you know, if you want loyalty from your customers, treating them well rather than harshly could be a better approach. We'll have to see how this all works out. Customer loyalty is critical. Yeah, you're right about that. Business analyst Mark Lee, great to see you. Thanks for joining us here. Thank you. Appreciate it.