New Research: Tinder’s Opaque, Unfair Pricing Algorithm Can Charge Users Up to Five-Times More For Same Service

Mozilla and Consumers International also found that Tinder Plus can offer up to 31 unique prices in a single country, and that older users are often charged more

Meanwhile, Tinder provides no meaningful transparency into how prices are determined.

(BRAZIL, INDIA, THE NETHERLANDS, NEW ZEALAND, REPUBLIC OF KOREA, & U.S. | FEBRUARY 8, 2022) — Tinder Plus users around the world must engage with an opaque and unfair personalized pricing algorithm, according to new research by Mozilla and Consumers International.

The research — which spanned five continents — reveals that within a single country, consumers can be quoted up to 31 unique price points for a Tinder Plus subscription. Further, some people are charged up to five times more for the exact same service: In the Netherlands, prices ranged from $4.45 to $25.95. In the U.S., they ranged from $4.99 to $26.99.

Consumers International and Mozilla also determined that Tinder’s personalized pricing algorithm can charge older users more money. On average across the six countries investigated, 30-49 year-olds were charged 65.3% more than 18-29 year-olds. This is occurring even after Tinder faced a $24 million lawsuit for unfair pricing based on age in California.

READ THE RESEARCH:

'A CONSUMER INVESTIGATION INTO PERSONALIZED PRICING'

To complement this research, Mozilla and Consumers International surveyed consumers about personalized pricing. Out of 598 people surveyed, 97% reported some level of concern about the practice. Further, 83% of those surveyed were in favor of an option to opt out of personalized pricing.

The research, titled “A Consumer Investigation into Personalised Pricing,” was conducted between May and September 2021. Mozilla and Consumers International worked with mystery shoppers in New Zealand, the U.S., the Netherlands, the Republic of Korea, India, and Brazil. These shoppers signed up for Tinder Plus, provided Tinder with personal factors like sex and location, and then shared their price quotes with our researchers.

This research builds on work by CHOICE in 2020, which investigated Tinder’s pricing in Australia. Mozilla has also launched a petition urging Tinder to be transparent about its pricing algorithm.

Says Ashley Boyd, VP of Advocacy at Mozilla:

“Personalized pricing isn’t inherently harmful if done fairly, responsibly, and transparently. But our research reveals Tinder’s algorithm is unfair, irresponsible, and opaque.”

“Opaque AI systems like Tinder’s are common across the marketplace, and only growing more so. We need a broad approach to reforming these systems, from stronger consumer protections to greater transparency for civil society and government.”

Says Helena Leurent, Director General at Consumers International:

“Consumers must be given greater agency over the use and dissemination of their personal data collected for personalized pricing purposes, while measures must be introduced to uphold data protections for all.”

”Consumer associations, civil society organisations, and enforcement and supervisory bodies should be given meaningful access to the algorithms that determine personalized pricing in order to establish if the practice is fair.”

Key findings from this study include:

-- Personalized pricing is incredibly opaque. In the Netherlands, consumers were quoted 31 unique price points. In the Republic of Korea and New Zealand, consumers were quoted 26 and 25 unique price points, respectively. And in some cases, people were charged up to five times more for the exact same service: In the Netherlands, prices ranged from $4.45 to $25.95. In the U.S., they ranged from $4.99 to $26.99.

-- Consumers, and the organisations that protect their rights, have little agency. Consumers are offered minimal transparency at the point of purchase on the use of personalized pricing, with unclear references to “promotional rates” and “offers and discounts tailored to your profile” buried deep within Tinder’s terms of use. What is clear: Tinder’s price-setting mechanism is drawing on age and other unknown factors, possibly including data points beyond those provided upon registration.

-- Unfair pricing is occurring on Tinder Plus. In five of the six countries surveyed, people aged 30-49 and 50+ were quoted substantially more on average than those aged 18-29. This difference was greatest in the Netherlands, the Republic of Korea, and India. On average across the six countries, 30-49 year-olds were charged 65.3% more than 18-29 year-olds.

-- Consumers care about personalized pricing, no matter their age. To complement this research, Consumers International and Mozilla also surveyed consumers about personalized pricing. Nearly all consumers surveyed reported some level of concern regarding the use of personalized pricing, with older consumers expressing greater concern on average. Participants aged over 30 were nine percentage points more likely to identify unfair pricing as a top concern.

-- Regulations must be enforced. The research also includes an assessment of current data protection regulations. It finds that a holistic approach to regulation that encompasses data protection, competition, and consumer protection laws may enable the effective regulation of personalized pricing.

-- The solution is meaningful transparency and access. Businesses must be transparent in their use of personalized pricing at the point of purchase and throughout the whole process, so consumers can make an informed decision. Further: consumer associations, civil society organizations, and enforcement and supervisory bodies should be given meaningful access to the algorithms that determine personalized pricing in order to establish if the practice is fair.

What can you do? Tell Tinder: it’s time for meaningful transparency into your pricing algorithms.