FTC demands answers from Walmart and Target on pricing

The Federal Trade Commission, the US agency that polices unfair business practices, has ordered Walmart and Target to hand over details about how they use personal data to set prices. Nine companies got the order. It also went to airlines, ride-share firms and food delivery companies. The agency wants to know if two people can be shown different prices for the same thing.

What the FTC is asking

The 15-page order asks whether the price of a ticket, ride, food delivery or other product varies from one person to the next. It points to analysis of personal data, including by artificial intelligence. It also asks how prices can vary because of things like loyalty programs.

The order goes beyond shoppers. It asks how companies set or adjust pay for workers based on personal information, which includes gig workers.

What officials and companies say

FTC Chairman Andrew Ferguson said the agency intends to scrutinize the opaque methods some companies may use to decide what consumers pay. He said people deserve to know whether their web surfing habits or other personal data are used to estimate the highest price they will accept.

Target pointed to a fact sheet it published earlier this month. It says Target does not use personal information to raise prices based on who guests are, where they live or when they shop. It says prices can vary because of local costs, pricing rules and competition. It adds that its Target Circle loyalty program uses shopping history to surface relevant deals, not to raise prices.

Walmart did not immediately respond to a request for comment. Over the past month, it has publicly defended itself against claims of personalized pricing and concerns about digital price tags on shelves.

What happens next

Each company has 45 days from the day it receives the order to respond. If a company does not comply, the FTC can go to federal court to force it. This order is a request for information. It is not a finding that any company did something wrong.

The order follows other steps. In August, the FTC began asking the public for comment on personalized pricing. Earlier this week, it joined 20 states in suing Dollar General over allegedly deceptive pricing practices.

What to do

Nothing in the material says what any company will report, and the full list of the nine companies was not given. Until more is known, a few habits are cheap and quick:

• Check the same item in the store app, the website and on the shelf.
• Compare loyalty offers with the regular price before you buy.
• Look at prices for flights, rides and delivery on more than one device or account if you can.