Delta, other firms ordered by FTC to share how they use personal data
The Federal Trade Commission is ordering nine companies including Atlanta-based Delta Air Lines to hand over “detailed information” on whether and how they use personal data to set pricing and compensation.
The commission on Wednesday said it also issued orders to Target and Walmart, two retailers with large footprints in Georgia, as well as ride-hailing companies Uber and Lyft, delivery services DoorDash and Instacart, and airlines United and JetBlue.
The FTC says each company must turn over information so the agency can assess whether pricing varies from person to person based on factors such as loyalty program participation or “analysis of personal data by superintelligence algorithms.”
The FTC also said it would examine if companies set wages based on personal data.
This comes as consumer anxiety mounts amid the rapid acceleration of artificial intelligence, and as digital price tags begin to flood the shelves of familiar stores.
It also comes days before the midterm elections, in which affordability concerns have been a central issue. Inflation ranked as the single most important issue facing Georgia in a poll released in May by The Atlanta Journal-Constitution.
FTC Chairman Andrew N. Ferguson said in a news release that the agency would “scrutinize the opaque methodology” that companies may be using to set prices and wages.
“Consumers deserve to know whether companies use their web surfing habits or other personal data to estimate the highest price they can charge each consumer,” Ferguson said in the release. “Workers also deserve to know if their compensation is affected by how companies use their personal data.”
The FTC said the nine companies would have 45 days from the date they receive the orders to respond. The commission also said it has the power to “compel compliance” in federal court.
Delta has explored how AI might revolutionize how it sets airfares, which last year drew the concern of several Democratic senators on what that could mean for consumer privacy and fairness.
On Wednesday, a Delta spokesperson sent the AJC a statement issued last year from Peter Carter, who was Delta’s chief external affairs officer at the time and is now president.
“There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized offers based on personal data,” the statement said. “We have zero tolerance for discriminatory or predatory pricing and fully comply with applicable privacy, pricing and advertising laws.”
A Delta spokesperson also told the AJC that the company would review the FTC’s order once it’s received.
Walmart CEO and President John Furner addressed concerns about personalized pricing in a September post on the company’s website.
“We don’t set different prices based on who you are or the time of day, and we won’t. Your income, shopping history, urgency or what we think you could pay won’t change the price,” Furner wrote.
Target also posted on its website earlier this month: “Target does not use personal information to raise prices for guests based on who they are, where they live or when they shop.”
Pricing concerns have caught the attention of lawmakers across the U.S.
Legislators in at least 30 states are considering bills about disclosure and transparency requirements on prices for consumer goods and services, according to the National Conference of State Legislatures.
The FTC said it issued a study on personalized pricing in mid-2024 and released its finding days before President Donald Trump took office. But the commission said it examined only “middlemen consultancies rather than the businesses” and “learned nothing” about actual pricing decisions.
“This study corrects the commission’s mistaken 2024 approach and demands information directly from companies who may be engaging in personalized pricing, rather than middlemen,” the agency said Wednesday.
In August, the FTC invited public comment on a proposed enforcement policy statement regarding personalized pricing.
And earlier this week, the FTC and 20 states filed a lawsuit against value retailer Dollar General, alleging the company engaged in deceptive pricing practices.