Personalized pricing is a form of price discrimination that involves setting prices at a different level for each individual consumer, based on an estimation of what they are willing and able to pay. The growth of the digital economy, along with advances in data collection and use of algorithms, has greatly expanded the capacity for companies to practice personalized pricing. However, there is still limited research on the extent to which personalized pricing is currently in use, and on the ramifications for consumer rights and protections.
This report presents the findings from a study into the prevalence of personalized pricing across six countries, using one global company as a case study, to better understand the practice and its effects on the consumer experience. The report provides an analysis of potential harms and benefits for consumers, and argues that personalized pricing is not inherently harmful to consumers, but rather is not always being implemented fairly, responsibly, and transparently, or with proper oversight. There must be effective legal, institutional, and social mechanisms in place to ensure that personalized pricing works in the best interest of all consumers.
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