Federal regulators are turning up the heat on retailers and grocery delivery operators over how they use personal customer data to determine everyday shelf and checkout prices.
According to a news release, the FTC has launched a new inquiry into how major retailers, grocery delivery platforms and consumer companies use personal data to set personalized prices and worker payouts.
The inquiry targets major retail and grocery delivery players — including Walmart, Target, Instacart and DoorDash — alongside airlines and ride-sharing companies. Issued under Section 6(b) of the FTC Act, the orders give these companies 45 days to disclose their methodologies, data inputs and algorithms for dynamic pricing and worker compensation.
Focus on Grocery Retail and Everyday Goods
While the inquiry spans multiple consumer industries, its primary implications hit directly at the grocery and retail sectors, where personalized pricing algorithms and data-driven loyalty programs have surged in recent years:
- Surveillance and dynamic pricing in aisle and delivery — The FTC is probing whether retail and delivery giants use consumer web browsing habits, location tracking, purchase histories or loyalty program participation to charge different customers different prices for the exact same groceries and household goods.
- Opaque worker pay in grocery delivery — For delivery platforms like Instacart and DoorDash, the order demands full transparency into how shifting payout algorithms determine gig worker earnings, specifically whether personal metrics — such as phone usage, acceptance rate history or location — are used to calculate pay offers for order fulfillment.
- Direct targeting of retailers over middlemen — The FTC highlights that a mid-2024 pricing study mistakenly focused on third-party software consultancies rather than the sellers themselves. This new action directly targets the frontline retail giants actually setting shelf, digital and delivery prices.
FTC Chairman Andrew N. Ferguson says consumers deserve to know if their personal data or shopping history is being leveraged to estimate the maximum price they can be charged for everyday purchases. A 2-0 commission vote allows the agency compulsory power to enforce compliance in federal court if the companies do not turn over their internal pricing data within the 45-day window.
“We intend to scrutinize the opaque methodology that some companies in these industries may be using to determine how much consumers pay or how much gig workers are paid for the same product or service,” Ferguson says. “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. Workers also deserve to know if their compensation is affected by how companies use their personal data.”
