The FTC’s new statement on personalized pricing offers this example: a ride-share company that quotes you a higher fare because it knows you don’t have a competing app on your phone. Readers of Chapter 17 will recognize it. The Ethical Dilemma in that chapter describes JustRide, a fictional Uber competitor whose app checks which other ride-share apps you have opened recently and quotes higher prices to riders who aren’t comparison shopping. I wrote that as a hypothetical. The FTC now describes it as an enforcement concern.

On August 19 the Federal Trade Commission released a proposed enforcement policy statement on personalized pricing — using personal data to set a price based on what a company believes an individual is willing to spend. Companies would have to give “clear and conspicuous” disclosure when they do it, including what kind of data went into the offer. The agency is direct about its limits. “The FTC does not have the legal authority to ban personalized pricing in all circumstances,” Chairman Andrew Ferguson said, “but businesses that fail to tell consumers how their personal data is being used to set a price may be in violation of the FTC Act.” The undisclosed part is the deceptive part. The vote to publish was 2–0, and public comments are open through September 18, 2026.

Two things make this worth class time. It is a draft, not a rule — worth saying out loud to students who read the headlines and assume the law changed. And the states got there first: New York already requires companies to disclose personalized pricing, and Maryland banned algorithms that vary food prices at the individual level. The FTC concedes it still doesn’t know how often businesses do this. What we do have is Instacart, which let retailers vary prices for individual shoppers in four cities who added identical items to their carts at the same moment. Instacart scrapped the tests after customer pushback, not after an enforcement action — which tells you where the binding constraint actually sits right now.

See “FTC Warns Retailers on Using Private Consumer Data to Raise Prices” (The Wall Street Journal, August 19, 2026). The FTC’s own announcement and the draft statement are on ftc.gov.

Claude was used to write a first draft of this blog post.

Relevant Chapters in Essentials of Marketing

This article and Chapter 17 (pricing objectives and policies) are a really tight fit. The chapter opens its policy discussion with the choice between a one-price policy — the same price to all customers buying under the same conditions and quantities — and a flexible-price policy, the same product to different customers at different prices. Exhibit 17–5 lays out four stages in administered pricing that end exactly where the FTC is looking: manual administration, rule-based systems, algorithm-driven dynamic pricing, and AI-powered personalized pricing.

It could also be used with Chapter 7 (improving decisions with marketing information) with the privacy hook. The chapter’s term is informational privacy — anything that limits others’ access to personal data people consider sensitive or confidential — and it tells students plainly that U.S. law here is a patchwork of state and federal rules covering specific data categories and specific practices.

Chapter 3 (evaluating opportunities in the changing market environment) is third, for the legal environment section. The chapter’s explanation of why consumer protection laws get written is that some laws exist because the average consumer lacks the ability or information to make an informed judgment. The FTC’s earlier study found personalized pricing could push prices up for shoppers who are new to a market — new parents, first-time car buyers. That is the textbook’s rationale for regulation showing up almost word for word in an enforcement document.

Class Discussion Ideas

The angle worth the class period is definitional. Students will hear “personalized pricing” and fold three different practices into one bucket: announced segment discounts (students, seniors, military), demand-based dynamic pricing (airline seats, surge fares), and individual prices built from personal data the customer didn’t know was collected. Chapter 17 treats all three as flexible pricing. The FTC draws its line only around the third, and only around telling people. Getting students to sort the practices first, then argue about where disclosure should be required, is where this earns its time.

In-Class Activities

Sort the Practices. In small groups, give students a dozen pricing practices on slips — a student discount on a streaming subscription, an airline fare that climbs as departure nears, Uber surge pricing, a supermarket loyalty-card price, Amazon repricing an item every 15 minutes, a higher quote because you are browsing on a newer phone, IHOP’s senior discount, a higher quote because your phone shows no competing app. Groups sort them into one-price, announced segment pricing, dynamic pricing, and individual personalized pricing, then mark which ones they think should require disclosure. Post the sorts and work through the disagreements. (Chapter 17)

Write the Disclosure. The FTC wants “clear and conspicuous” disclosure, including the type of data used, but doesn’t supply wording. In teams, have students draft the actual on-screen disclosure a food delivery app would show at checkout — real sentences, placed where they say it goes. Swap drafts between teams; the receiving team plays customer and says whether the disclosure would change what they do. Most drafts either say too little to be honest or too much to survive contact with a checkout screen, which is the point. (Chapter 17)

Comment to the FTC. The comment period is open through September 18, 2026. Assign each student a stakeholder — a national retailer, a consumer advocacy group, a small independent merchant, a pricing-software vendor — and have them read the draft statement and write a 200-word public comment in that role. Read three aloud and have the class guess the stakeholder. (Chapter 3)

The JustRide Debate. Two teams argue the resolution: JustRide’s pricing policy should be legal so long as it is disclosed. Give the affirmative the chapter’s flexible-pricing logic and the FTC’s own admission that it cannot ban the practice; give the negative the chapter’s warning about eroding trust and the #JustLies backlash the case describes. Then poll the class and ask what would change their vote. (Chapter 17)

Discussion Questions (and Answer Ideas)

1. Chapter 17 distinguishes a one-price policy from a flexible-price policy. Which one is personalized pricing, and does that distinction still do useful work when software sets the price? (Chapter 17)
   • Answer: It is flexible pricing — the same product and quantity to different customers at different prices. The chapter says most U.S. firms have used one-price policies for administrative convenience and to maintain goodwill, and that big data is now moving firms toward flexible pricing. Point students at the second half of that sentence. Administrative convenience stopped being a constraint once computers took over, which leaves goodwill and the law as the only things holding the line.
2. Senior discounts and student pricing are flexible pricing too. Why doesn’t the FTC’s statement reach them? (Chapter 17)
   • Answer: Those prices are set by announced segment membership, and the customer knows the basis and can see it. The FTC’s concern is an individual price built from personal data the consumer never knew was collected. Some students will argue the line is thinner than it looks — a loyalty-card price is also built from personal purchase data — and they have a point worth letting them make. The best answers land on disclosure rather than on the data itself as the distinguishing feature.
3. Wouldn’t the Robinson-Patman Act already cover charging two customers different prices for the same product? (Chapter 17)
   • Answer: Mostly no, and students who reach for it are making an intelligent wrong guess. Robinson-Patman makes price discrimination illegal only if it injures competition, and it is aimed at sellers who favor some business buyers over their competitors. Two consumers buying groceries are not competing with each other, so there is no injury to competition to prove. That is why the FTC is working from the FTC Act’s unfair-or-deceptive standard instead — a useful reminder that the pricing laws in the chapter each protect something specific.
4. The FTC says it cannot ban personalized pricing and can only require disclosure. Is disclosure enough? (Chapter 3)
   • Answer: Chapter 3 says consumer protection laws get written when the average consumer lacks the ability or information to make an informed judgment, and disclosure supplies information, so it fits the chapter’s logic. But the FTC’s own statement concedes that as personalization gets more sophisticated, consumers are less likely to benefit — which is close to admitting information may not be enough. Students should weigh both sides. The strongest answers note that a disclosure delivered at the moment of purchase, when the shopper has no time and no alternative seller, restores very little bargaining power.
5. Chapter 7 says U.S. privacy law is a patchwork of state and federal rules. What does the New York/Maryland split cost a national retailer? (Chapter 7)
   • Answer: New York requires disclosure; Maryland bans individual-level algorithmic pricing on food outright. A national retailer either builds state-by-state pricing logic and disclosure rules, or sets one national policy at the strictest state’s standard. Most choose the second because the first is expensive and legally risky, which means in practice the strictest state writes national policy. That is what a patchwork costs, and it is why firms often lobby for a federal standard they would otherwise oppose.
6. Instacart stopped its price-variation tests after customer pushback rather than after any enforcement action. What does Chapter 17 say about why? (Chapter 17)
   • Answer: The chapter’s caution on dynamic pricing is that when customers perceive pricing as unfair or opaque, trust and brand reputation erode, and managers have to weigh short-term gains against long-term credibility. Instacart’s tests appear to have been legal; the constraint was customer reaction. Then ask whether that constraint is reliable. It works only when customers can compare prices and talk to each other, which is exactly what individual pricing makes harder — and that argument is the case for a disclosure rule.
7. Chapter 7 lists three things privacy laws typically require: clear notice, explicit consent, and access or deletion. The FTC proposal asks only for notice. Should consent be required before a firm prices you individually? (Chapter 7)
   • Answer: A defensible answer runs either way. Requiring consent would effectively end the practice, since few shoppers would opt in — which is why the FTC, lacking authority to ban personalized pricing, may have chosen notice deliberately. Students arguing for consent should say what a workable consent screen looks like at checkout; students arguing against should say what stops notice from becoming another unread terms-of-service box.
8. You are the marketing manager at a delivery app. A personalized pricing program has raised revenue about 4 percent, and counsel says the FTC draft would require you to disclose it. Do you disclose and keep it, disclose and kill it, or keep it and stay quiet? (Chapter 17)
   • Answer: Open-ended by design, and the third option is the one to press on — the draft is not final, but the FTC Act’s deceptive-practices standard already exists, so “stay quiet” may not be as safe as it sounds. Strong answers pick one path and defend it against the chapter’s dynamic pricing caution and a stated pricing objective. Students who choose “disclose and keep” should have to write the disclosure sentence, because the wording is the whole decision.