EU bans opaque pricing under new Digital Markets Act

Personalized pricing is rolling out across e-commerce, streaming and travel, letting companies charge different prices to different shoppers based on data such as location, browsing history and income signals.

The practice is already common in ride-hailing and airline tickets, where algorithms adjust fares by demand and device type. A growing wave of startups now offers retailers real-time pricing engines that set individual offers based on a customer’s predicted willingness to pay. Early pilots show discounts can rise for lower-income users while premium tiers are pushed to high-income shoppers, shifting more deals toward mutual benefit.

A 2023 study by the University of Chicago found personalized pricing can raise overall sales by 3 to 5 percent because it turns away only the customers who value a product least. The same research showed that when airlines used income proxies to offer lower fares to travelers in poorer ZIP codes, those routes saw a 12 percent jump in bookings. Retailers report similar gains: an online fashion chain saw conversion lift 8 percent after letting algorithms show discounted prices to first-time visitors from areas with below-average household incomes.

Regulators are eyeing the trend. The European Union’s Digital Markets Act and a U.S. Senate bill introduced this year would require transparency about how prices are set and ban opaque discriminatory practices. If those rules pass, companies will have to disclose the data points behind each price and allow opt-outs, which could slow the rollout of the most aggressive models. Even so, the underlying math suggests personalized pricing is here to stay—especially for industries where small price cuts can unlock big volumes of buyers who were previously priced out.