SBE Council Comments: FTC’s “Personalized Pricing” Proposal

By SBE Council at 25 September, 2026, 2:03 pm

FEDERAL TRADE COMMISSION

Office of the Secretary

600 Pennsylvania Avenue NW
Washington, D.C. 20580

In the Matter of:
Proposed Enforcement Policy Statement Regarding Personalized Pricing
Docket No. FTC-2026-1057

COMMENTS OF SMALL BUSINESS & ENTREPRENEURSHIP COUNCIL

INTRODUCTION

The Small Business & Entrepreneurship Council (SBE Council) is pleased to submit the following comments in response to the Federal Trade Commission's (the "Commission") Proposed Enforcement Policy Statement Regarding Personalized Pricing. While SBE Council supports the intended goals of protecting consumers from genuinely predatory and deceptive practices, we write to express significant concerns about the proposed framework's misunderstanding of how dynamic and data-driven pricing tools are utilized by small businesses and how the disclosure regime would impact their competitiveness and growth.

SBE Council believes the Commission's draft framework conflates the various issues and confusion that surround "surveillance pricing" with routine, pro-competitive, and pro-consumer inventory management tools used by small businesses. SBE Council's surveys of small business owners demonstrate that rather than extracting maximum consumer surplus from their use of pricing tools, small businesses deploy these tools to navigate inflationary pressures, clear expiring inventory, and compete against larger enterprises. In fact, in many instances, respondents state that pricing tools have signaled to cut prices.

SBE Council asserts the current definition of "personalized pricing" lacks clear boundaries and risks sweeping in standard, non-deceptive retail practices. The introduction of vague definitions of "surveillance pricing" would force small retailers to operate under fear of accidental non-compliance, thus creating a chilling effect on routine commercial promotions that help their small businesses compete and support consumers.

If finalized in its current form, the proposed framework would impose a significant compliance burden on many small businesses and stifle standard pro-consumer discounting and loyalty programs. A new "Small Business Check Up Survey" that SBE Council will release next week, finds that 78% of small business owners anticipate some level of encumbrance from such a disclosure requirement.

HOW SMALL BUSINESSES UTILIZE DATA-ASSISTED PRICING TOOLS

The Commission's proposal seems to assume that algorithmic pricing is primarily used to isolate individual consumer data points (such as browsing history or location) to raise prices covertly. Our empirical survey data heavily refutes this narrative. For example, SBE Council's 2026 Small Business Technology Use Survey reveals:

A Tool Improve to Improve Efficacy and Efficiency: The survey found that 45% of small businesses use automated pricing tools to manage inventory lifecycles - such as discounting perishable groceries, florals, or seasonal apparel before they become dead stock. Other key uses include promotional optimization (48%) and competitor monitoring (44%), among others that automate the complex and labor-intensive work associated with setting competitive prices.

A Tool for Competitiveness: 48% of small business respondents access pricing tools through direct software purchase or subscription, while 44% use tools embedded within e-commerce marketplaces. These tools allow small businesses to monitor market fluctuations more efficiently and respond more rapidly, thus bolstering competitiveness. These are tools they could not build or possible afford on their own. In fact, 94% of small businesses report improved competitive positioning from pricing tools. No respondents report competitive deterioration.

THE HARMFUL BURDEN OF THE PROPOSED DISCLOSURE REQUIREMENTS

The Commission's framework is broad and vague, mandating that any business altering prices based on consumer segment data must provide a "clear and conspicuous" disclosure explaining the personalized logic behind the price. While perhaps more viable for larger enterprise with a dedicated legal and software engineering department, this requirement could be a structural impossibility for many small businesses.

More broadly, the mandate could lead to the abandonment of common retail practices that benefit consumers and the small businesses that serve them. These include customized loyalty discounts, targeted digital coupons, and first-time buyer incentives. Small businesses use tailored discounts to compete with bigger retailers. If offering a discount code based on a customer's purchase history or loyalty tier is classified as an unfair or deceptive "personalized pricing" practice, small retailers will be forced to abandon these programs. This eliminates a primary tool for customer retention and acquisition, and harms budget-conscious consumers.

Undermines the Efficacy of the Digital Checkout Experience. Forcing a small e-commerce boutique to insert a text block reading "This price has been altered based on your data" to determine the price at the point of a routine $5 loyalty discount would trigger consumer friction and possibly alarm. By extension, this would undermine the consumer experience, small business sales, and the trust that independent businesses have built and rely upon.

A "Plug-In" Compliance Trap? Many small firms rely on standard SaaS platforms (e.g., Shopify, WooCommerce and others). These small business owners do not own or program the underlying algorithms; they choose pre-set strategies. It is technically difficult - if not impossible - for an average small business owner to accurately "disclose the methodology" of a proprietary third-party software plug-in, leaving them potentially exposed to severe Section 5 liability for technical non-compliance.

Burdens for Small Businesses of All Kinds. Compliance and regulatory burdens are typically disproportionate for small businesses. The proposed framework and its requirements could impose significant burdens on small e-commerce companies, service businesses, and traditional brick-and-mortar stores of all kinds. As noted previously, 78% of small businesses expect some level of burden from the requirement (with some being more burdened than others.)

To comply with the proposed disclosure mandates, small businesses will need to implement complex tracking and reporting software. Large enterprises already possess the sophisticated data architecture and capital to absorb these compliance costs. As noted above, many small businesses, rely on third-party, off-the-shelf software and lack the resources for customized compliance tools. Consequently, this policy will disproportionately burden small retailers and reduce market competition, which is not a good outcome for consumers.

CONCLUSION

Dynamic and data-assisted pricing tools are not inherently predatory. For small businesses, they support the consumer experience, are equalizers that help them withstand economic volatility, and help them compete in a rapidly-evolving digitized marketplace.

Moving forward, a framework can be refined around a risk-based approach focusing on outcomes. That is, rather than regulating the technologies or data inputs businesses use, the Commission should focus entirely on the actual economic harm or deceptive outcomes produced by bad actors.

Rather than finalizing a sweeping, overbroad policy statement that could structurally disadvantage small businesses and chill routine retail discounts, SBE Council urges the Commission to consider a targeted, outcome-based enforcement strategy that focuses strictly on verifiable consumer harm, establishes a clear safe harbor for small businesses, and utilizes existing authorities to punish bad actors engaging in actual deception or predatory behavior.

Respectfully submitted,

Karen Kerrigan

President & CEO