Privacy & Information Security Law Blog

On November 15, 2012, the UK Office of Fair Trading (the “OFT”) launched a call for information to investigate whether offering “personalized pricing” based on data companies collect about consumers’ online behavior violates consumer protection legislation in the UK. The OFT will look at how companies gather data related to “consumers’ browsing history, purchases, demographic, hardware, operating system, etc and use this to personalise products and prices.” In particular, as indicated on the OFT’s website, the OFT will analyze:

• evidence from media investigations and reports which have alleged that companies use data to modify prices offered to consumers based on their browsing history or other observed data; and
• whether consumers have enough control over what data gets passed or sold on to third parties, in particular, whether companies offer clear information to consumers about what data they need in order to provide the product or services, or whether companies are acquiring data simply to sell on to others.

The OFT also will consider business and technological developments in the online shopping market and consumers’ understanding of how their information is used, as well as whether consumers are being treated unfairly as a result of companies’ practices.

“We know that businesses use information about individual consumers for marketing purposes,” said OFT Chief Executive Clive Maxwell. “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.” Maxwell believes that the call for information will provide the OFT with a better understanding of consumers’ practices and help the Office evaluate the need for possible enforcement action.

As part of its investigation, the OFT will be consulting with the U.S. Federal Trade Commission on commercial uses of consumer data, which will be the subject of a workshop to be hosted by the FTC on December 6, 2012 that will explore privacy concerns associated with the online collection of consumer information.

If you are interested in submitting a response to the OFT’s call for information, please visit the OFT’s website.

For further information about the FTC’s work on the commercial uses of consumer data, please visit the FTC’s website.