The Federal Trade Commission recently announced a proposal to set some rules around personalized pricing.
Personalized pricing refers to companies using artificial intelligence and personalized data to set the price of a good or service.
The FTC’s proposed policy would require businesses to “clearly and conspicuously disclose” if they are engaging in personalized pricing and share the data types they’re using to set those prices.
The FTC is also is asking the public to comment on the proposed rule changes.
Last June, Colorado Governor Jared Polis vetoed House Bill 26-1210, which aimed to ban the use of personal surveillance data for individualized pricing and algorithmic wage-setting.
The governor said the bill was too broad.
On an upcoming episode of Real Talk with Micah Smith about the rise of AI, an expert explains the technology behind dynamic pricing.
“I think this field is experiencing a big change right now with the change of technology and the rise of AI,” Dan Zhang, University of Colorado Boulder Leeds School of Business associate dean and co-founder of Ramsi said. “This has been practiced for many many years. It started in industries like airlines and hotels. The price of an airline ticket for example fluctuates as most people already know.”
Zhang said A.I. allows companies to respond to market changes faster when using dynamic pricing.
“It takes in more information at a faster pace,” Zhang said.
When asked for his best advice for consumers, Zhang said consumers should keep shopping around.
“I would say comparison shopping, search for more than one channel, and also stay flexible and plan ahead,” Zhang said.
Watch full episode of Real Talk with Micah Smith here or on Sundays at 5:30pm on Denver7.
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