FTC Urged To Investigate Discrimination Based On Data

A consumer advocacy group is asking the Federal Trade Commission to investigate allegations that dozens of companies -- including Home Depot, Walmart and Hotels.com -- are discriminating against consumers based on data about them.

The organization, a Consumer Education Foundation initiative called #Represent, takes aim at what it terms “secret surveillance scores.”

Those scores, according to the group, are generated based on data about consumers collected by “a shadowy group of privacy-busting firms that operate in dark recesses of the American marketplace.”

“This petition highlights a disturbing evolution in how consumers’ data is deployed against them,” leaders of the group “#Represent” write in a 38-page complaint to the FTC.

“Major American corporations, including online and retail businesses, employers and landlords are using Secret Surveillance Scores to charge some people higher prices for the same product than others, to provide some people with better customer services than others, to deny some consumers the right to purchase services or buy or return products while allowing others to do so and even to deny people housing and jobs,” #Represent's petition states.

The petition is signed by #Represent policy director, Laura Antonini, and president, Harvey Rosenfeld.

“Discriminating against Americans based on Secret Surveillance Scores contradicts and undermines the bedrock principles of competition and fairness that have long served as a foundation for the nation’s marketplace.”

Antonini and Rosenfeld draw on a host of published reports about how retailers are using data in controversial ways, including by charging different prices to consumers based on information about them.

Researchers from Northeastern University said in 2014 that retailers including Home Depot, Walmart, and Hotels.com charge different online prices to different web users.

The advocates also used a Chrome extension created by researchers at Northeastern University to conduct new research into price discrimination by online retailers. Antonini and Rosenfeld said their own research confirmed that some e-commerce sites display different prices to different users.

For instance, the price extension tool allegedly revealed that Home Depot displayed a price of $101 for 5 gallons of Glidden Premium satin latex exterior pant to some people, but $119 to others.

The advocacy group says the discrimination is not limited to differential pricing. Some companies also have rejected returns from customers based on their “secret surveillance scores,” the complaint alleges.

In addition, some companies allegedly use data when deciding customer service strategies, including how long to keep particular customers waiting on the phone.

The watchdogs allege that using “secret surveillance scores” to determine pricing, customer service and the like is illegal under the Federal Trade Commission Act.

“Americans have a right to know when their personal data is being used against them by companies making instantaneous, automated decisions and judgments about them as consumers, and to be protected against unfair and deceptive practices,” the petition states.

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