Manitoba has enacted Canada's first ban on personalized pricing, with the federal New Democratic Party (NDP) advocating for a similar nationwide prohibition. These measures, framed as consumer protection against extractive practices, are unlikely to lower prices. Instead, they would redistribute prices, eliminating discounts at the lowest end and increasing costs for price-sensitive consumers. A field experiment indicated that over 60 percent of consumers paid less under personalized pricing, primarily those who would otherwise be priced out of the market, while those paying more had a higher willingness to pay.
A ban would likely cause firms to set a single price point somewhere in the middle of the previous price distribution. This means higher prices for the most price-sensitive consumers, who are often those most affected by cost-of-living pressures. Measures such as loyalty programs, member pricing, and targeted coupons, which are forms of price discrimination based on customer-specific data, would also be impacted by broad bans like the federal NDP's proposal, which targets any use of personal data to charge different prices for the same product.
While policymakers might appear responsive to affordability concerns, a ban on personalized pricing is seen as a blunt instrument that does not address specific harms. More effective approaches would focus on transparency requirements, robust privacy protections, and clear prohibitions on unlawful discrimination. Manitoba's Bill 49 prohibits using personal data to raise prices but not to lower them, which could lead firms to abandon personalized pricing or reset standard prices upwards, framing anything below as a discount. Dynamic markdowns on expiring perishables, which benefit consumers and reduce waste, could also be negatively affected.
