- Data analytics
FTC opens rulemaking on food and grocery delivery fees and markups
The FTC has opened rulemaking on hidden fees and price markups in food and grocery delivery. What online vs offline price data shows platforms.
The Federal Trade Commission (FTC) has begun the process of regulating fees and pricing transparency in the food and grocery delivery sector. Under strict federal oversight, platforms that fail to clearly disclose total costs to consumers could eventually face civil penalties.
An Advance Notice of Proposed Rulemaking, recently published by the FTC, addresses what the agency calls unfair and deceptive fee practices. It is the first step toward formal rules on how delivery platforms display prices, service fees, and markups. The agency is seeking evidence on whether consumers are being misled by the difference between in-store prices and the prices seen on delivery apps, and flexible, opaque pricing models at major platforms are coming to an end.
Regulators are specifically interested in total price disclosure: whether platforms are honest about a meal costing more on an app than it does at the restaurant counter. Proving compliance or justifying these price gaps requires granular market data, beyond internal policy memos. Without a clear view of how its prices compare to the physical menu at thousands of locations, a platform cannot accurately respond to federal inquiries or identify where its brand might be at risk of deceptive labeling.
Variable fees and promotional discounts add to the complexity. The FTC is asking 65 detailed questions, many of which require economic data that only sophisticated tracking can provide. A platform that cannot show the incremental costs associated with local regulations may be unable to defend its service fee structures during the rulemaking process. Intelligence tools show exactly what the consumer sees at the final checkout screen in each zip code, beyond manual spot checks.
Violations could cost over $53,000 per instance
Financial stakes rise as the FTC moves toward a final rule, and violations could eventually cost companies over $53,000 per instance. Platforms and restaurant chains can start auditing their price gaps now with online vs offline pricing tools that monitor parity across their entire network, so public disclosures match the reality of the marketplace and hold up against federal scrutiny and class action lawsuits.
Ahead of the FTC's final rule, DoubleData can measure the gap between your in-store and app prices. Contact our experts at DoubleData.
Source: FTC Issues Call for Comments on Food and Grocery Delivery Rule | JD Supra
