This article was originally featured in Broadband Breakfast. Written by Javier Palomarez.
A local business offers a lower price to a first-time customer, or a deal to bring back someone who stopped coming in. In a new Expert Opinion for Broadband Breakfast, USHBC President and CEO Javier Palomarez argues that a draft enforcement statement from the Federal Trade Commission could put that kind of offer under federal scrutiny.
The statement from FTC Chairman Andrew Ferguson targets businesses that use consumer data to personalize prices, and suggests that failing to tell customers how their data shaped a price could violate the FTC Act. Palomarez agrees the agency should go after companies that deceive customers. His concern is how far the net reaches. A large company can send disclosure questions to its legal department. A small business without in-house counsel may decide the safer move is to stop offering personalized deals, which costs it sales and leaves customers paying more.
He also holds Ferguson to his own record. As a commissioner, Ferguson criticized the Lina Khan-era FTC for leaning on hypothetical scenarios instead of factual findings in its work on what it called surveillance pricing. Palomarez argues the new draft relies on the same kind of hypotheticals, while hidden fees on hotel bookings, already covered by an existing FTC rule, still turn up.
His message to the agency is direct: “Leave the discounts alone.”
