OFT investigates data used in online pricing...this time it's personal

The Office of Fair Trading (‘OFT’) has announced a call for information on online personalised pricing. Following on from its market study on Online Targeting of Advertising and Prices in 2010 (available here), the call for information is intended to help the OFT better understand the use of consumer data and what impact it has, if any, on personalised pricing online.

The OFT intends to use feedback during the call for information to assess how traders gather consumer data from individuals’ browsing history, previous purchases, demographics, the hardware and operating systems used, whether consumers have sufficient control over their own personal data and how their data may be traded or passed between organisations.

The OFT wishes to determine whether the collection and use of such data has an impact on personalised pricing, if personalised pricing occurs now or may occur in the future, and what harm it may cause to consumers. The OFT also intends to assess whether current consumer protection legislation is sufficient in protecting consumers with respect to personalised pricing online.

Personalised pricing is understood to include offering the same product online to many consumers at different prices based on consumer profiling and the data which has been collected on consumers’ spending habits. The OFT does not currently have any evidence of such behaviour but is aware of press attention and concern about the practice.

Launching the call for information, Clive Maxwell, OFT Chief Executive, said:

‘We know that businesses use information about individual consumers for marketing purposes. This has some important potential benefits to consumers and firms. But the ways in which data is collected and used is evolving rapidly. It is important we understand what control shoppers have over their profile and whether firms are using shoppers’ profiles to charge different prices for goods or services. This call for information will help us understand these practices better and to decide whether or not this is an issue on which the OFT needs to take any action.’

The OFT will be hosting discussions with businesses and other interested parties including the Federal Trade Commission (‘FTC’) in the USA. The FTC published its own report on Protecting Consumer Privacy in an Era of Rapid Change (available here) in March 2012, and will host a workshop on December 6 2012 exploring the privacy implications of collecting data on consumers’ online activities.

The OFT is encouraging feedback and evidence to be submitted by January 4 2013 ahead of publishing a report in Spring 2013. The report will set out the OFT’s outcomes and whether or not there is a need to develop best practice in order to improve self regulation in this area.

Please contact us if you require further information about your obligations regarding data protection and privacy, or on the OFT's practice in calls for information and market studies and what conclusions the OFT might draw or remedies it could suggest.