The omnibus directive and online price personalization: a mere duty to inform?

Abstract

As part of the EU’s New Deal for Consumers, Directive (EU) 2019/2161 (the Omnibus Directive) enshrines into European law a duty for traders to inform consumers who visit their online stores if the prices they are offered have been tailored based on their personal traits by a pricing algorithm. Although this commercial tactic sounds innovative, the phenomenon of Online Price Personalization (OPP) is not new, as retailers have been reported to embark on such practices since the turn of the millennium. Consumers have expressed feelings of discomfort and outrage towards OPP, even in cases where it could work to their advantage (i.e., leading them to pay a lower price when compared to other consumers). This paper will look to offer a clear definition of OPP, setting it apart from similar practices. It will also elaborate on how consumers should be informed about OPP under the Omnibus Directive and seek to outline the current constraints EU law poses to OPP. While EU anti-discrimination law is briefly analyzed, deeper focus will be dedicated to Privacy & Data Protection Law and the Unfair Commercial Practices Directive (UCPD) as means to protect consumers from OPP, regardless of whether it discriminates against them or not. The paper will try to demonstrate how, in several cases, traders deploying OPP may be misleading consumers for the purposes of Articles 6 and 7 of the UCPD, and how the “average consumer” criterion is unfit to legally assess the fairness of OPP under the UCPD.