Probe launched into online personalised pricing

shopping onlineAre you paying more for your online shopping than your friend, next door neighbour or colleague? Well, consumer watchdog the Office of Fair Trading (OFT) certainly thinks that could be the case.

Along with US counterparts at the Federal Trade Commission, OFT is now investigating whether customers shopping on the internet could be asked to pay higher prices because of the websites they have visited previously or because of the gadgets and gizmos they own.

There are fears that retailers could show higher prices to shoppers using expensive gadgets to spend their online pounds, like an Apple iPad or top-of-the-range Samsung tablet.

Information is gathered about internet users’ browsing habits through cookies, where data is sent from a website to be stored in a web browser. When that user goes back to the same website, the stored data is retrieved to tell the website about the previous activity.

This interest can be shared with other sites, compiling records of individuals’ browsing histories. It’s why European and US law makers forced websites to declare when they are using cookies and to get users to click on a button to agree to the use of cookies when they are browsing websites.

personalised pricing imageBut the fact websites can collate such data from consumers and potentially use it to tailor not just what information or offers individuals see on a particular site, but to perhaps change prices for different people, has led to the launch of the current investigation.

Amazon famously tried out personalised pricing but CEO Jeff Bezos has since admitted the “experiment” was a mistake. It’s easy to see how websites could change prices depending on who is viewing the site though. Amazon, for example, still carefully tracks details about what you buy and collects information about your purchasing habits, identifying your interests, whether you perhaps have children you buy for and whether you are likely to buy after browsing. You are then presented with recommendations in a bid to persuade you to part with your cash, based on previous purchases.

Clive Maxwell, who is chief executive at the OFT said it was important to understand what websites were using collected data for. “Innovation online is an important driver of economic growth,” he said, adding: “Our call for information forms part of our ongoing commitment to build trust in online shopping so that consumers can be confident that businesses are treating them fairly.

“We know that businesses use information about individual consumers for marketing purposes. This has some important potential benefits to consumers and firms.personalised pricing

“But, the ways in which data is collected and used is evolving rapidly and 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.”

It’s the second time the OFT has looked at the issue of online personalisation, having published a report in May 2010 when it said it could find no evidence, at the time, of market wrongdoing. But, because technological advancements move so quickly, the watchdog promised to keep a “watching brief”.

It’s good to know someone is looking after consumer interests. But, if you are worried about the information sites are gathering about you, you can always use your menu options to clear cookies from your computer.

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