Algorithmic pricing: FTC demands data from nine major firms

Nine major American companies have been ordered to reveal how they calculate prices for customers and wages for workers. The Federal Trade Commission issued subpoenas to Delta, United, JetBlue, Lyft, Uber, DoorDash, Instacart, Target, and Walmart. The inquiry seeks to understand how these firms use algorithms and loyalty programs to determine costs.

The move follows a wave of lawsuits and state investigations alleging that consumers face different prices for the same goods based on their purchase histories. Drivers in the gig economy face similar disparities, with pay rates often fluctuating based on personal data. The FTC stated it will examine the "opaque methodology" these industries use to set prices and wages.

FTC Chair Andrew Ferguson said in a statement that the agency intends to scrutinize how companies determine what consumers pay. He noted that US family budgets are already strained by inflation. Ferguson pointed to "surveillance pricing" and overcharges at stores like Dollar General and convenience chains as part of the problem. The commission aims to police "unfair or deceptive acts or practices," though its authority over airlines is limited compared to other sectors.

The specific requests ask for data showing whether ticket prices, ride-share fares, or food delivery costs vary between individuals. The FTC wants to know if factors like loyalty program participation or personal data analysis drive these differences. The agency described the tools as "super-intelligence algorithms" that analyze individual consumer behavior.

Rohit Chopra, former FTC commissioner and current head of California’s Business and Consumer Protection Agency, commented on the agency's past performance. He said, "What we have seen so far is that they have not been using these studies that produce meaningful reports that ultimately lead to any rule-making changes." This follows a July 2024 inquiry under the Biden administration that targeted firms like McKinsey and JPMorgan Chase for selling surveillance pricing products.

A January 2025 FTC finding confirmed that precise location and browser history are frequently used to target individual consumers with distinct prices. Several states are now introducing legislation to ban such practices and restrict electronic shelf labels that adjust prices based on shopper habits. The current probe adds to a growing body of legal scrutiny on digital pricing strategies.

The FTC can impose fines and regulations on most of the named companies, with airlines being a partial exception. The agency has recently joined forces with state regulators to pursue penalties in other cases. The companies must now turn over the requested information to allow the agency to assess its findings.