This article is part of ‘Guidelines on the protection of the online consumer’. View full guideline

Rules on personalized online offers

Do you as a company personalize prices, offers, ads, the search results of third-party products, or your online environment? If so, you must be sufficiently transparent about this, and you cannot mislead consumers or exploit the vulnerabilities of consumers as a result of which they are unduly influenced. This may constitute an unfair commercial practice, which is prohibited.

Your company personalizes if you change your offers on the basis of characteristics or the behavior of a consumer or a group of consumers, for example setting a price or running an ad that depends on a consumer’s postal code or order history, or the ranking or personal offers that have been adjusted on the basis of a consumer’s browsing and order history. It may also involve an online environment (user interface) with personalized buttons, colors, pictures, and texts that have been adjusted on the basis of browsing history and specific information about the behavioral characteristics of consumers.

Personalization can help people. They might see products or information that they find relevant sooner. Products can also be offered at a lower price to consumers that have less to spend. However, consumers can also be unduly influenced in their purchasing and choice processes.

ACM assesses commercial practices that involve personalization from the perspective of the average member of the group of consumers that is targeted by the personalization. The more you personalize, the smaller the group of consumers will be that you are targeting, until you end up targeting an individual consumer. The question of whether a practice is misleading or involves undue influence may thus depend on the degree of personalization.

In addition to consumer protection law, other rules may also apply if you personalize. If you process personal data, you will also need to comply with the General Data Protection Regulation (GDPR). The Dutch Data Protection Authority (AP) enforces compliance with the GDPR. Also, make sure that your personalization does not illegally discriminate within the meaning of the Dutch General Equal Treatment Act (AWBG). In individual cases, the Netherlands Institute for Human Rights (CvdRM) decides whether or not a practice constitutes illegal discrimination.

Furthermore, as of 17 February 2024, online platforms will have to comply with the new rules laid down in the Digital Services Act. For example, they will have to explain how personalized recommendations are created, and what criteria are used in that process. On very large online platforms, consumers will also have to be able to opt for non-personalized recommendations. And it will be illegal for online platforms to present personalized ads using special categories of personal data such as racial or ethnic origin, religious or philosophical beliefs, or health. Also, online platforms will no longer be able to present personalized ads using the personal data of underage users of their service if they are aware with reasonable certainty that the user of their service is a minor.

What is required and what is not allowed?

Do you personalize prices? If so, tell consumers clearly that you do so.
Do you offer consumers the option of searching for products of third parties, and do you personalize the rankings of the search results? If so, tell consumers clearly what the key factors are on which the personalized ranking has been based. Inform them also about how factors relate to other factors, such as their relative weight. This information must be easily and directly accessible from the page on which the search results are presented.
Make sure that all variants of your online service that can be accessed by consumers comply with the relevant rules, for example regarding A/B testing.

Do not personalize in such a way that you exploit the vulnerabilities or characteristics of consumers as a result of which they are unduly influenced. This may be the case, for example, if financially vulnerable consumers get personalized offers to buy products on credit.
Do not be so unclear about personalization that consumers become misled.
Do not mislead consumers about the degree to which you take into account their behavior, preferences, or interests when personalizing.
Do not give the false impression that a personalized offer is better than the offers to other consumers.

Tips

Tell consumers how personalization takes place, for example by explaining on the basis of what information about consumers you personalize prices.
Offer consumers the option of turning off personalization easily.

Examples

Example: the personalized price of a television

An online electronics store runs the following ad: ”Create an account now so we can give you personal offers, and make it easier for you to place orders”.

Consumers with accounts sometimes get offers when they log into their accounts. The company offers consumers with accounts a discount on products. Consumers without accounts do not get the discount. Consumers with accounts see the following message next to the price of a television set: “Personal offer! Original price: 299 euros. Just for you: 255 euros.”

However, consumers with accounts sometimes also see a higher price for certain products than do consumers without accounts. Those prices do not clearly indicate that the price has been personalized.

This is not allowed. The company must inform consumers actively that prices have been personalized. It can do so, for example, by adding a message near the personalized price, such as: “We offer you this product at a price that we have determined on the basis of your current location and your recent searches. This price can be different from those presented to other customers.’

Relevant regulations

Explanation of regulations

Guidance on the interpretation and application of the Unfair Commercial Practices Directive

Enforcement

ACM took action against an online platform that failed to inform consumers clearly about price personalization