Algorithmic Personalized Pricing: A Personal Data Protection and Consumer Law Perspective

Abstract

Price is often the single most important term in consumer transactions. As the personalization of e-commerce continues to intensify, the law and policy implications of algorithmic personalized pricing i.e., to set prices based on consumers’ personal data with the objective of getting as closely as possible to their maximum willingness to pay (APP), should be top of mind for regulators. This article looks at the legality of APP from a personal data protection law perspective, by first presenting the general legal framework applicable to this commercial practice under competition and consumer law. There is value in analysing the legality of APP through how these bodies of law interact with one and the other. This article questions the legality of APP under personal data protection law, by its inability to effectively meet the substantive requirements of valid consent and reasonable purpose. Findings of illegality of APP under personal data protection law may in turn further inform the lawfulness of APP under competition and consumer law.

The published version of this article is available on the website of the Canadian Bar Review: https://cbr.cba.org/index.php/cbr/article/view/4914

Keywords: price, personalized pricing, AI, algorithms, contracts, competition law, consumer law, personal data protection law, privacy, consent, representations, unconscionability, pre-contractual obligations

JEL Classification: K12, K19, K39