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Same website, same product, different price than your next door neighbour. Or a plane is almost fully booked and the price for the remaining tickets shoots through the roof. The rise of Big Data has vastly increased the potential for online price discrimination. Joost Poort and Frederik Zuiderveen Borgesius (IViR) have studied this phenomenon.

Joost Poort and Frederik Zuiderveen Borgesius have published a paper on online price discrimination based on two surveys of a cross-sectionof the Dutch public. Online price discrimination involves web shops charging different prices to different customers for the same product, based on information they have about them. The rise of big data has vastly increased the possibilities for engaging in online price discrimination in recent years.

Unfair and intolerable

A wide majority of the Dutch population thinks online price discrimination is unfair and intolerable, and that it should be banned, according to the study. They also disapprove of a number of types of price discrimination, at first glance less controversial, which are already in common use. For example, many people perceive it as unfair that holiday homes cost more during school holidays than they do outside those periods. And many find it unfair when air tickets go up in price once a plane starts to sell out.

Lack of specific rules

There are no specific regulations governing price discrimination in the Netherlands provided there is no discrimination on prohibited grounds such as gender, race, or religion. The authors had already shown in their earlier work that online price discrimination usually involves the processing of personal data. The General Data Protection Regulation then applies (GDPR). In short, the GDPR requires that businesses honestly disclose that they engage in price discrimination, for instance in a privacy statement. The authors do not claim that the transparency requirement in the GDPR is a panacea, though. For one thing, people rarely read privacy statements. New rules may perhaps eventually be required.

Research study

The study is available here via open access: