The British Broadcasting Corporation (BBC) is reporting that the British governmental agency Office of Fair Trading (OFC) has launched an investigation into how widespread the practice of “personalized pricing” on the Internet is. This issue has come about due to intelligence reports that have found several as-yet unnamed companies engaging in the practice. Personalized pricing is where internet companies charge different amounts to different companies based on their web browsing history, internet sales records and other information companies are able to obtain. Mail Online reports that Amazon, the huge online retailer was caught engaging in the practice but stopped after it was found out.
Such targeted pricing policies are achievable due to the widespread use of small tokens left behind on users computers – called cookies, they contain data that has been recorded regarding user activity. Most simply make generic notes regarding which parts of a site are visited, but some continue to monitor user activity even after the user has left the site that planted the cookie.
In its report, the BBC is saying that the OFC has vowed to make the practice illegal if it’s not already. Online reports that the FTC in the United States is also looking very carefully at the practice as well and is also considering putting rules against it in place, if it’s found to be legal.
Retailers find personalized pricing attractive Online says because some customers are willing to pay more for some products than others. As an example, they note that some retailers have found that people who buy iPhones and/or iPads (which cost more than similar devices made by other companies) are willing to pay more for other products as well – because they see more value in brands than do other people. In some instances, such as with Apple products, or designer clothes, it’s openly known that products cost more for no better reason than the name that is printed on it. Consumers willingly pay more for what they perceive as more value. Retailers argue that personalized pricing on the Internet is essentially the same thing despite the obvious difference – in one case consumers are aware of what is going on and agree to it, in the other they neither know what is going on nor agree to pay more. That, say British officials, constitutes fraud.
What’s missing from the argument, Online points out, is the voice of the consumer. Thus far, it’s not really known if users care if the prices they see on websites are tailored for them. As this issue becomes more well know, it’s almost certain to become clear as users begin posting their opinions on Facebook, or sending out Tweets expressing how they feel.