Schumer wants probe into airlines' new scheme for setting fares

Sen. Chuck Schumer is calling for a federal investigation into airlines mining personal data in order to charge higher fares to certain customers.

Schumer (D-N.Y.), the Senate minority leader, warned of “dynamic pricing” software airlines are developing — which could track the websites a potential flier has visited and figure out details like their income or other purchases they’ve made in order to decide how much to charge them for a flight.

“This is ‘Big Brother’ meets ‘Big Business’ and it is frightening combo for already-price badgered airline travelers,” said Schumer.

Schumer wrote to the chair of the Federal Trade Commission asking for an investigation into how airlines are implementing dynamic pricing and whether it violates privacy rules.

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Airlines already charge widely different fares for seats on the same flights depending on factors like when the ticket is purchased and demand. It’s unclear how far along they are with implementing dynamic pricing based on more personal characteristics.

“The airlines have already monetized every single inch of the plane: smaller seats, less food, charges for carry-ons, and so the thought that they or others within the travel industry are looking to nickel and dime consumers based on their mobile phone or computer’s browser history is a sad state of affairs that just might violate consumer protections,” Schumer said. “Your ticket price to fly shouldn’t take off because of who you are.”

The new technology attempts to predict how much a customer is willing to pay for a flight based on their personal data.

For instance, someone whose search history suggests they’re traveling for business might get a higher fare, whereas a tourist browsing for vacation spots might get a lower offer. Someone who looks up an obituary and then searches for a flight to the same state might get charged more because the software assumes they’re traveling to a funeral and have little choice about whether to make the trip.

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Schumer said that if airlines are allowed to get away with the tactic, it may expand to many other industries.

“When it comes to finding ways to monetize every atom of the traveling experience, few industries are better than the airlines,” he said. “So, we must take the very real concern for the use of this latest version of traveler tracking straight to the FTC before it inches mainstream.”