Monday, March 12, 2018
WASHINGTON, D.C. — Consumers Union, the advocacy division of Consumer Reports, today applauded Sen. Chuck Schumer (NY)’s call for the Federal Trade Commission (FTC) to investigate the airline industry amid questions about the use of “dynamic pricing” and consumers’ personal online data to set the price of airfares, which Schumer termed “a sad state of affairs that just might violate consumer protections.”
In a letter to the FTC, Schumer cited recent news reports of airlines developing software that could track their potential customers’ online browser histories and use that data to decide how much to charge them for a flight.
William J. McGee, Aviation Adviser for Consumer Reports, said, “We are seeing growing evidence of airlines using dynamic pricing in ways that discriminate against consumers. There are serious concerns about the use of people’s online behavior and information to determine prices, and there are grave implications for people’s privacy. These kinds of practices are simply unacceptable. They leave consumers powerless when they try to shop for the best price. We don’t know what data airlines may intend to cull from our online searches, or how they’re using that data against us. Yet we’re told to pay no attention to that company behind the screen. We are pleased to see Senator Schumer’s call for a federal probe, and we urge the FTC to stand up for consumers and help protect our privacy.”
Since 2000, Consumers Union has been investigating the murky pricing practices by airlines and travel companies online, and reporting on what CR termed “disturbing evidence of bias” in how airfares are presented to the public. In recent years some of these marketing schemes have come to light, particularly after the International Air Transport Association—the global airline industry’s leading trade organization—unveiled “New Distribution Capability,” a detailed program to enhance “product differentiation.” A recent study commissioned by an aviation company reported the airlines are developing “dynamic availability of fare products” that “could be adjusted for specific customers or in specific situations.”
In October 2016, Consumer Reports published an extensive study of nine leading travel sites and compared identical itineraries in real time using both “scrubbed” browsers cleared of all “cookies” and browsers used for extensive web searches. Among 372 searches, CR found 42 pairs of different prices on separate browsers for the same sites retrieved simultaneously. Industry representatives dismissed them as technological glitches. In previous years, Consumers Union found similar evidence of pricing based on search histories with airlines and other products and services.
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Contact: David Butler, dbutler@consumer.org, 202-462-6262
Consumer Reports is the world’s largest independent product-testing organization. Using its more than 50 labs, auto test center, and survey research center, the nonprofit rates thousands of products and services annually. Consumers Union works for health reform, food and product safety, financial reform, and other consumer issues in Washington, D.C., the states, and in the marketplace.