How the websites you visit (and even the gadgets you own) could decide how much retailers charge you

Internet shoppers could be unfairly charged higher prices because of the sites they visit and even the gadgets they own, it has been claimed.

So-called ‘personalised pricing’  is now under investigation by the Office of Fair Trading and their counterparts in the US amid fears it could become widespread.

The system could be misused, allowing retailer to target shoppers using an iPad or other expensive gadget and give them higher prices.

Fears are growing that retailers could use browsing history and even the gadget used to adjust pricing

HOW IT WORKS

Consumers visit a site and search for a particular product.

Their interest is recorded in a 'cookie', a small file on their computer, and may be shared with other sites.
As more online research is done, data is collected on offers or alternative products looked at, along with what device the user is shopping from.
The data is then used to calculate a 'personalised price' for each user.

Amazon is among those to have tried personalised pricing, although it dropped the idea after complaints, and CEO Jeff Bezos admitted the experiment was 'a mistake'.
The fears have prompted the OFT to launch an investigation, and it is already working with the US FTC.

'Some businesses monitor consumer behaviour online, collecting and recording information about individual shoppers' purchasing habits, websites they have visited and the items and services they have looked at, as well as the type of device or internet browser they use,' the OFT said.

Clive Maxwell, OFT Chief Executive, said: 'Innovation online is an important driver of economic growth.
'Our call for information forms part of our ongoing commitment to build trust in online shopping so that consumers can be confident that businesses are treating them fairly.

'We know that businesses use information about individual consumers for marketing purposes.
'This has some important potential benefits to consumers and firms.

'But the ways in which data is collected and used is evolving rapidly, and it is important we understand what control shoppers have over their profile and whether firms are using shoppers' profiles to charge different prices for goods or services.'

The OFT has called for consumers who believe they may have been a victim of the problem to get in touch

WHAT IS A COOKIE?

 A cookie is a text file that typically holds a website name and a user ID.
When you first visit a site the cookie is downloaded to your PC.
It can note information such as how many times you have visited
Knowing how many times you have visited, the website can then tailor the information it displays to you on the website.
You can clear cookies from your computer, usually from a menu option.

The OFT has also said it may call for changes in law if the practise is found to be widespread.

'We will also consider enforcement action against firms that we may identify as breaching consumer protection law and we can also make recommendations, such as changes to data law.'

Nick Pickles, director of privacy campaign group Big Brother Watch, welcomed the inquiry.
'Companies are not just seeking to profit from targetted advertising when they collect data about us.
'One clear issue is when that data is used to change the prices of products we see and the OFT is absolutely right to be investigating this area.
'It's yet another incentive for companies to track us online and for more unscruplous business a way to profit from privacy infringements.
'It highlights why privacy isn't just an important issue for individuals, but an essential part of markets.
'Privacy is an essential part of competition and as companies seek to gain an unfair advantage by exploiting the data they hold or collecting more data without permission, they should be taken to task under both data protection and competition law.'
Irish airline Ryanair also faced allegations but no evidence was found by the company behind price comparison  experts InvisibleHand.

Operations director Ryan Conway welcomed the inquiry, saying: ‘Anything that improves the experience for consumers so they aren’t paying more than they should, we’re all for.’