Are consumer prices based on factors such as geography and marital status Photo by Christin Hume on Unsplash

Companies can use customer data and technology to offer different prices to consumers

The government and the Competitions and Markets Authority (CMA) are to undertake new research into the practice of retailers targeting online shoppers.

Personalised pricing involves customers spending different amounts when searching for the same products. The online shopping includes holidays, cars and household goods.

The research will explore whether and how personalised pricing makes use of personal data points such as a consumer’s address, marital status, birthday and travel history.

Business Secretary Greg Clark MP said:

“Ensuring markets work fairly and in the interests of consumers is a cornerstone of our modern Industrial Strategy, and I am proud to say that our consumer protection regime is among the strongest in the world.

“The research we are undertaking will help us better understand how we can ensure businesses work in a way that is fair to consumers.”

Research into consumers searching for insurance products

The government-commissioned research will explore:

  • How widespread this practice is
  • How businesses are applying it through different mediums like search engines, apps or comparison tools
  • The extent to which personalised pricing is preventing shoppers getting the best deals

This week the Financial Conduct Authority also announced it will be investigating the issue of personalised pricing for car and home insurance policies after finding hidden discrimination between customers.

The regulator’s study will assess the scale of the issue, whom it affects, and possible solutions.

Andrea Coscelli, Chief Executive of the Competition and Markets Authority, said:

“With more of us shopping online, it’s important that we understand how advances in technology impact consumers. This personalised pricing research will help us stay at the forefront of emerging technology, so we can understand how best to protect people from unfair practices where they exist.

“We will also use the results of the research as part of our ongoing efforts to help vulnerable consumers.”