Monday, 24 June 2013

Personalised pricing exists, dear OFT

The OFT's report on personalised pricing, which came out in May, said there was no evidence 'that retailers use information collected about individuals to offer higher prices to specific customers', eg websites tailoring their prices to the individual or adjusting prices based on visitor behaviour.

Actually, there is evidence. Due to being away, I couldn't respond to their call for information before the deadline. But now I want to recount my experience last year with a well-known travel web site. It should be reproducible, if the OFT or anyone else wants to try it (maybe not from an OFT IP address, in case they're smart enough to try to detect that and adapt!).

Search for a particular flight on a large travel site, eg from London to city X between particular dates and maybe back too. Select the dates etc, then note down the price quoted. Don't delete your cookies.

Next day (or maybe a few hours later), go back to the site using the same browser. Now, repeat the same search and selections. You'll find that the price quoted may well be higher. You might think, oh well, it's just because general prices have changed in those few hours? Think again.

Try this. Delete your cookies (and clear your browser cache for luck), then repeat the same search and selections, or else do so in a different browser which you haven't used before to visit the same site. You may find that the price is back to the original price!

This happened to me when I was searching for flights last year. I tried it again with different options, and had similar results, days later - ie higher prices on repeat searches, unless I had deleted cookies first. So this is certainly evidence that some sites are using personalised pricing at least some of the time.

I've had a similar experience on Amazon where a repeat search did not reveal that the price had been lowered for that product, but searching via a different browser showed a price decrease. However, it could have been a coincidence in that case, as I've not been able to reproduce that, though a friend has reported similar experiences. All this does mean that when I search on Amazon I'll make sure I'm not logged in first, and will be clearing cookies in between searches even if I have to login to complete a purchase.

So, beyond the OFT's letter to over 60 'leading online businesses', there's lots more that the OFT could investigate, if they want to try mystery shopping. I hope they will. This isn't just a data protection issue, it involves consumer protection more generally too.

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