Use of customers’ personal data may leave them out of pocket

9th Nov 2018

The government is set to launch an inquiry into the use of personal data to set individualised prices for consumers who shop online for things including holidays, cars and household goods.

Figures from the Office for National Statistics reveal that 17% of retail sales are now made online, which has raised fears that artificial intelligence and bots are being used to personalise prices to the detriment of some consumers. 

The fluctuation of online prices depending on time or availability has become common – for example, for Uber taxis or flights. However surge pricing is also set to become more prevalent for some digital brands. 

The concerns centre on the use of dynamic pricing, which is based on information gathered on individual consumers, including their location, marital status, birthday or travel history. 

The inquiry is supported by the competition watchdog, the Competition and Markets Authority. The organisation’s Chief Executive, Andrea Coscelli, commented: “With more of us shopping online, it’s important we understand how advances in technology impact consumers… so we can understand how best to protect people from unfair practices where they exist. We will also use the results in our ongoing efforts to help vulnerable consumers.” 

The issue was raised at a recent meeting of the new Consumer Forum body, which included various watchdogs and Consumer Minister Kelly Tolhurst. 

Business secretary Greg Clark said: “UK businesses are leading the way in harnessing new technologies… But companies should not abuse this technology and data to treat consumers, particularly vulnerable ones, unfairly."

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