3C Urges FTC to Protect Small Businesses’ Access to Digital Pricing and Promotional Tools
The Connected Commerce Council (3C) appreciates the opportunity to comment on the Federal Trade Commission’s (FTC’s) Proposed Enforcement Policy Statement on Personalized Pricing. 3C represents digitally empowered small businesses, many of which use digital pricing, promotional, and customer-engagement tools to compete with larger businesses. 3C supports the Commission’s efforts to protect consumers from deceptive or unfair pricing practices and urges the FTC to ensure that its enforcement framework does not unintentionally discourage legitimate tools that benefit small businesses and consumers.
The Proposed Enforcement Policy Statement characterizes personalized pricing as consumer profiling aimed at charging each customer the maximum price they’re willing to pay for a given good or service, but does not limit the definition only to data used to increase prices. In sharp contrast to this characterization, millions of small businesses use customer data to offer personalized pricing in the form of discounts to win business. For example, small businesses may offer coupons for items left in customers’ online shopping carts; savings on items that complement customers’ recent purchases; or special deals intended to re-engage lapsed customers. These personalized offers don’t typically involve data concerning points, such as whether someone cannot leave their home or has multiple children. Instead, they use innocuous data, e.g., an item’s presence in a shopping cart. These discount strategies can help small businesses[1] win sales, compete with larger businesses, and ultimately benefit consumers by offering lower prices.[2]
Failure to acknowledge such beneficial personalized discounts and promotions — and, in turn, subjecting them to the same enforcement standards will disproportionately harm small businesses. Beneficial personalized pricing empowers small businesses to compete for — and win — sales that would otherwise go to bigger businesses with bigger marketing budgets.[3] If small businesses are forced to provide “clear and conspicuous” disclosures about personalized discounts and promotions, they’ll confuse — and likely lose — a significant number of customers, making it harder for them to succeed.[4] In short, requiring these disclosures when small businesses are offering discounts will scare consumers, disincentivize them from completing a purchase and cost small businesses money.
Moreover, the proposed enforcement will impose significant compliance costs on small businesses. Most small businesses lack dedicated legal, technical, and compliance resources. Vague or highly individualized disclosure obligations could therefore impose disproportionate costs on small businesses, either through additional legal and technical expenses or by discouraging them from offering the discounts and promotions that help them win customers and compete.
3C also notes that the Proposed Enforcement Statement makes no distinction between consumer-data-informed pricing and market-data-informed pricing, potentially creating additional risks for small businesses. Pricing is one of the hardest tasks for many small businesses. Price too high, and lose business, price too low and lose money. Today, small businesses increasingly determine products’ prices with the help of sophisticated software that can process key market and cost inputs including inventory, demand, competition, regional market conditions, taxes, and shipping.[5] Such software may, for example, determine that a product should cost more in California than in Florida, or that larger rivals are charging for a worse product and recommend that a business raise its prices. Simply using software or algorithims to support these decisions should not be treated the same as using personal data to raise prices on individual consumers, and 3C respectfully suggests that the two should not be regulated according to the same rules and standards.
The Commission should also account for how small businesses use third-party technology. Small merchants frequently rely on marketplaces, ecommerce platforms, customer-management systems, advertising tools, loyalty programs, and other services whose underlying data-processing systems they neither control nor can independently audit. Enforcement expectations should therefore reflect a business’s knowledge of and control over the relevant data and pricing decisions.
3C offers a final observation about the Proposed Enforcement Statement. The Statement asserts that “personalized pricing without adequate disclosures likely violates section 5 [of the FTC Act],” and states that the Commission “…intends to enforce aggressively against” any such practices. At the same time, however, the statement notes that “the extent to which businesses currently use personalized pricing is not well understood, and the effects of personalized pricing on consumers are unclear.” 3C notes that the Commission’s Surveillance Pricing 6(b) study remains incomplete, and that preliminary work concludes that “in terms of broader, more definitive impacts to prices or market participants, this area of study is still underway.” As such, 3C encourages the Commission to proceed carefully and ground enforcement in demonstrated deception or consumer injury while its broader study of personalized pricing continues.
3C advocates for policies that foster small-business innovation, growth, and success. Accordingly, we support policies and enforcement that promote market competition, and caution against those that stifle or distort it. As the Commission continues developing regulatory and enforcement standards for personalized pricing practices, we respectfully urge it to:
- engage in a balanced, comprehensive study of personalized pricing and its effects
- distinguish among undisclosed individualized price increases based on personal data, personalized discounts and promotions, and market-data-informed pricing, and develop appropriate enforcement standards for each
- ensure any disclosure requirements are clear and scalable for small businesses, with concrete examples or appropriate safe harbors
- ensure enforcement expectations account for a small business’s knowledge and control when pricing or promotional tools are provided by third-party technology providers
- strive for policies that allow small businesses to continue offering beneficial personalized discounts and promotions that help them win customers, compete with bigger companies, build customer loyalty, and succeed in today’s digital economy.
Thank you again for giving us the opportunity to comment on this important issue.
Sincerely,
Rob Retzlaff
Executive Director
Connected Commerce Council
Notes
- Robaczek, Evelyn, “How Personalized Coupon Marketing Outperform Generic Sales,” Vouchery.io, October 2, 2024, https://www.vouchery.io/post/why-personalized-discounts-outperform-general-sales.
- Mark Abraham et al., “What Consumers Want from Personalization,” Boston Consulting Group, Dec. 12, 2024, https://www.bcg.com/publications/2024/what-consumers-want-from-personalization.
- “How Personalized Discount Emails Drive Loyalty & Sales,” Insider One, Oct. 10, 2025, https://insiderone.com/guide-to-personalized-discount-emails/.
- “Consumers Want Personalized Promotions; Just Half Receive Relevant Ones,” PYMNTS, March 1, 2024, https://www.pymnts.com/consumer-insights/2024/consumers-want-personalized-promotions-just-half-receive-relevant-ones/.
- “Dynamic Pricing in Retail,” Retailcloud, retailcloud.com.
