Tinder to inform consumers about price personalization following an intervention by European consumer authorities
Starting mid-April, dating app Tinder will inform consumers when it uses personalized discounts. Tinder has agreed to this commitment following discussions with the European consumer authorities in the Consumer Protection Cooperation Network (CPC). This action was led by the Netherlands Authority for Consumers and Markets (ACM) and the Swedish Consumer Agency. They launched the investigation into Tinder’s possible unfair prices after reports had come out suggesting Tinder engaged in age discrimination. Although Tinder had already stopped doing this, it did prompt an investigation into the way in which Tinder prices its services for different customer groups. This investigation revealed that Tinder uses automated price personalization. The price you pay as a customer is automatically determined using data that Tinder has collected about you as a customer. As a result, some customers pay more than others. Price personalization is allowed in this case, but only if the company is clear about it towards its customers. Following discussions with the consumer authorities, Tinder has committed to adjusting its policy. Users of the platform will be informed in advance when the app uses personalized discounts.
Cateautje Hijmans van den Bergh, Member of the Board of ACM, explains: “It is important that consumers know that the price they need to pay has been personalized, and that they know on what basis that price was determined. Those factors can play a role in the decision to buy something or not. That is only possible if businesses give clear information about this.”
What was this case about?
Consumers find the price of a product or service very important. Price plays a significant role in their purchasing decision. That is why consumers must be informed about this in a clear and timely manner. It is also important that consumers are able to have confidence in online deals. If a price is determined on the basis of automated personalization, businesses must inform consumers about this in advance. They also need to inform them how that personalized price was determined. That allows consumers to understand why they are charged a certain price. In that way, they can make a well-informed decision on making a purchase or not.
Tinder also offers a free version of its app, next to the paid version. In the promotion of the paid version, Tinder used an automated form of price personalization. The app registered the degree to which consumers had previously shown interest in the paid version, and subsequently based the price thereon. That personalized price entailed getting 50% off on the first month of the paid service. This process occurred automatically. Tinder had failed to inform consumers about this, even though it is required to do so.
What will Tinder do differently now?
The intervention of the CPC Network of European consumer authorities has resulted in Tinder making two changes. Tinder has committed to inform consumers clearly about the automated personalized discounts. In that context, Tinder will provide information about what factors are used in that personalization process, such as the interest that a consumer showed in the paid version. Tinder will have implemented the changes in the app by mid-April at the latest. In addition, Tinder committed to no longer using age-based price personalization without informing consumers in advance first. It has already stopped doing so.
ACM’s focus on online
ACM wishes to protect people and businesses against the market power of big tech firms and against online misleading practices and manipulation so that everyone is able to reap the benefits of the digital economy. The European consumer authorities and the European Commission join forces if businesses are active in multiple EU countries in order to ensure compliance with the rules across the entire European Union. In this case, Sweden and the Netherlands took the lead in collaboration with the European Commission. The action was launched in July 2022.