September Newsletter

Sep 7

18 min read

LABOUR AND EMPLOYMENT

Regulatory Update

Centre Notifies Bonus Eligibility and Calculation Rules under the Code on Wages, 2019

The Ministry of Labour and Employment, vide two notifications S.O. 4711(E) and S.O. 4710(E) dated 25 August 2026 issued under Section 26 of the Code on Wages, 2019, has clarified the eligibility and calculation framework for statutory bonus payable to employees. The notifications provide that employees earning wages of up to ₹21,000 per month are eligible for statutory bonus, while prescribing the wage ceiling to be considered for calculating the bonus payable to eligible employees.

The notifications provide for the following:

Employees earning wages of up to ₹21,000 per month are eligible for statutory bonus under the applicable provisions of the Code on Wages, 2019.
For eligible employees earning more than ₹7,000 per month, the bonus is to be calculated on ₹7,000 or the applicable minimum wage, whichever is higher, rather than on the employee's actual wages.
The notifications have been given retrospective effect from 21 November 2025, aligning the bonus framework with the commencement of the relevant provisions of the Code on Wages, 2019.

The clarification provides greater certainty to employers and employees on the applicability and computation of statutory bonus under the Code on Wages, particularly in relation to the prescribed wage ceiling and the basis for calculating bonus. It also marks a further step towards operationalising the statutory framework introduced under India's new labour codes.

Notable Judgement

State of U.P. v. Jai Bir Singh

In a significant judgment dated 20 August 2026, a nine-Judge Bench of the Hon’ble Supreme Court reconsidered the scope and interpretation of the term “industry” under Section 2(j) of the Industrial Disputes Act, 1947, in State of U.P. v. Jai Bir Singh. The reference arose from a challenge to the expansive interpretation of “industry” adopted by the Supreme Court in Bangalore Water Supply & Sewerage Board v. A. Rajappa (1978), including the “triple test” laid down therein for determining whether an activity constitutes an industry.

The nine-Judge Bench delivered a fractured verdict on the correctness of the earlier test. Four Judges, led by the Chief Justice of India, proposed a narrower formulation which places greater emphasis on the commercial character of the activity, while four Judges expressly reaffirmed the correctness of the 1978 Bangalore Water Supply judgment. Justice P.S. Narasimha took a separate view, declining to disturb the earlier interpretation on the ground that the Industrial Disputes Act has since been repealed and replaced by the Industrial Relations Code, 2020. The reformulated test proposed by the CJI-led majority would require a systematic and organised activity involving employer-employee cooperation and the production, distribution or provision of goods or services possessing a discernible commercial character analogous to trade or business.

The Court clarified that the reformulated test would operate prospectively and would not affect pending disputes under the repealed Industrial Disputes Act, which would continue to be governed by the interpretation laid down in Bangalore Water Supply. The Court further clarified that the judgment does not alter the definition of “industry” under the Industrial Relations Code, 2020.

The judgment represents a significant development in Indian labour jurisprudence, particularly in relation to the scope of establishments and activities falling within the statutory concept of an “industry”. At the same time, the fractured nature of the verdict and the prospective application of the reformulated test preserve the continuing relevance of the 1978 Bangalore Water Supply interpretation for disputes arising under the repealed legislation.

International Update

Australia Introduces Minimum Standards for On-Demand Delivery Workers

Australia's first Fair Work Commission Minimum Standards Order for employee-like workers in the on-demand delivery sector came into effect on 17 August 2026, establishing minimum standards for workers engaged through digital delivery platforms.

The framework provides for the following key requirements:

Minimum earnings rates for covered delivery workers, beginning at AUD 31.30 per hour.
Requirements concerning reimbursement and payment of work-related expenses.
Minimum requirements relating to insurance coverage for eligible workers.
Obligations concerning record-keeping and transparency in relation to workers' engagement and payments.
Additional minimum standards governing aspects of working conditions for employee-like workers in the on-demand delivery sector.

The introduction of the framework represents a significant development in the regulation of platform-based and gig-economy work in Australia, providing statutory minimum protections to a category of workers operating outside the traditional employment model.

ARBITRATION

Regulatory Update

Central Government Establishes Mediation Council of India

The Ministry of Law and Justice, vide notification dated 27 August 2026, has established the Mediation Council of India (MCI) under Section 31(1) of the Mediation Act, 2023, with its head office in Delhi. The Council has been constituted as the statutory body contemplated under the Act and is intended to support and regulate the mediation ecosystem in India.

The notification provides for the following:

Constitution of the Mediation Council of India under Section 31(1) of the Mediation Act, 2023.
Establishment of the Council's head office in Delhi.
The Council will function as a body corporate with perpetual succession, with the power to acquire, hold and dispose of property, enter into contracts, and sue or be sued in its own name.
The Council is expected to play an institutional role in the development, promotion and regulation of mediation under the statutory framework established by the Mediation Act, 2023.

The establishment of the Mediation Council of India marks an important step towards operationalising the institutional framework under the Mediation Act, 2023 and developing a structured regulatory framework for mediation in India.

Notable Judgement

KKH Finvest Pvt. Ltd. & Anr. v. Ashiesh Shukla & Ors.

In a judgment dated 5 August 2026, the Hon’ble Supreme Court held that the participation of a non-signatory in the performance of an underlying contract is an important factor in determining whether such party intended to be bound by the arbitration agreement. The judgment was delivered by a Bench of Justices Sanjay Kumar and Sanjeev Sachdeva in the matter concerning a Memorandum of Settlement under which KKH Finvest Pvt. Ltd. had agreed to acquire a company and its sister concern for a settlement consideration of ₹8 crore.

The dispute arose after Ashiesh Shukla, a shareholder in the target company, was excluded by the Delhi High Court from the arbitration proceedings on the ground that he was not a signatory to the Memorandum of Settlement. Although Shukla had not executed the principal settlement agreement, he had entered into a separate Share Purchase Agreement under which he agreed to transfer his shares as part of the broader acquisition contemplated by the settlement. The Supreme Court observed that the transfer of his shares was fundamental to completion of the settlement and that his agreement expressly acknowledged the broader transaction and the underlying Memorandum of Settlement.

Relying on the principles laid down in Cox and Kings Ltd. v. SAP India Pvt. Ltd. and ONGC Ltd. v. Discovery Enterprises Pvt. Ltd., the Court held that a non-signatory may qualify as a “veritable party” to an arbitration agreement where its conduct, participation in the transaction and performance of obligations under an interlinked agreement demonstrate an intention to be bound. The Court emphasised that participation in the performance of the underlying contract, together with factors such as the composite nature of the transaction and commonality of subject matter, must be considered holistically.

Allowing the appeal, the Supreme Court held that Ashiesh Shukla was a veritable party to the Memorandum of Settlement and was therefore amenable to arbitration. The Court accordingly directed that the disputes involving him be referred to the same sole arbitrator already seized of the connected disputes. The judgment reinforces the principle that the absence of a signature, by itself, is not determinative of whether a party is bound by an arbitration agreement, and that the conduct and commercial context of the parties must also be examined.

International Update

International Arbitration Bodies Respond to EU AI Act Guidelines

On 6 August 2026, the London Court of International Arbitration (LCIA) coordinated a joint response by 16 leading arbitration and dispute resolution organisations to the European Commission's draft guidelines on the classification of high-risk AI systems under the EU AI Act. The submission sought to ensure that the proposed framework appropriately reflects the functioning of international arbitration and distinguishes between the roles of arbitral institutions and tribunals.

The development formed part of a broader effort by the international arbitration community to address the growing use of artificial intelligence in dispute resolution:

The joint submission called for clarification that the high-risk AI obligations applicable to alternative dispute resolution should attach to AI systems used by arbitral tribunals in their adjudicative and decision-making functions, rather than AI systems used by arbitral institutions solely for administrative and organisational purposes.
The participating institutions also urged the European Commission to reconsider its description of “investment dispute bodies”, noting that investment disputes typically involve investors and States rather than solely disputes between businesses.
The development builds on the Chartered Institute of Arbitrators' Guideline on the Use of AI in Arbitration, first published in 2025, which provides guidance for arbitrators, parties, counsel and experts on the responsible use of AI in arbitral proceedings.

The response comes against the backdrop of the EU AI Act, which entered into force on 1 August 2024 and established the world's first comprehensive, risk-based regulatory framework for artificial intelligence. The development highlights the increasing intersection between AI governance and international arbitration, particularly the need to ensure that regulatory obligations are assigned to the actors responsible for adjudicative decision-making while preserving the administrative role of arbitral institutions.

INSOLVENCY AND BANKRUPTCY CODE (IBC)

Regulatory Update

IBBI Issues Discussion Paper on Identifying Fraudulent or Malicious Initiation of CIRP

The Insolvency and Bankruptcy Board of India (IBBI), on 14 August 2026, issued a Discussion Paper on Guidance to Insolvency Professionals for Due Diligence to Identify Fraudulent or Malicious Initiation of Corporate Insolvency Resolution Process, and Recourse under Sections 60(5) and 65 of the Insolvency and Bankruptcy Code, 2016.

The Discussion Paper seeks to strengthen the integrity of the Corporate Insolvency Resolution Process (CIRP) by providing greater guidance to insolvency professionals on identifying potential misuse of the insolvency framework.

The Discussion Paper proposes the following key measures:

Guidance for insolvency professionals to undertake due diligence to identify indicators of fraudulent or malicious initiation of CIRP.
Greater clarity on the circumstances in which insolvency professionals may consider approaching the Adjudicating Authority under Sections 60(5) and 65 of the IBC.
Identification and reporting of potential misuse of the CIRP framework, particularly where proceedings may have been initiated for purposes other than genuine insolvency resolution.
The proposed framework is intended to strengthen the integrity and credibility of the CIRP while facilitating more consistent identification of potentially abusive insolvency proceedings.

The Discussion Paper represents a further step by the IBBI towards strengthening safeguards against the fraudulent or malicious use of insolvency proceedings and promoting greater due diligence in the initiation and conduct of CIRP. Comments on the proposals were invited until 24 August 2026.

Notable Judgement

Srinivasa Reddy Velagala v. Sravanthi Infratech Pvt. Ltd.

In the judgment dated 12 August 2026, the Hon’ble Supreme Court held that claims for damages arising from an alleged breach of contract cannot constitute “operational debt” under Section 5(21) of the Insolvency and Bankruptcy Code, 2016, unless such damages have been assessed and crystallised through adjudication by a competent court or arbitral tribunal. The judgment arose from an insolvency application under Section 9 concerning claims under an Engineering, Procurement and Construction (EPC) contract.

The dispute involved various amounts claimed under the EPC contract, including payments due for completed contractual milestones as well as suspension, idling and demobilisation charges arising from the alleged breach of contractual obligations. The Court distinguished between amounts payable as consideration for goods supplied or works executed under an existing contractual payment schedule and claims seeking compensation for losses allegedly suffered as a consequence of contractual breach. While the former could constitute operational debt, the latter remained claims for damages until adjudicated and crystallised.

The Court further held that an insolvency application under Section 9 cannot be founded on an unadjudicated claim for contractual damages, as the insolvency process cannot be used as a mechanism for determining disputed liability or quantifying damages arising from a contractual breach. The Court also observed that the continued subsistence of the underlying EPC contract does not create a continuing cause of action for amounts that had already fallen due, and that limitation must be examined from the date on which the relevant operational debt became due and payable.

Allowing the appeal, the Supreme Court set aside the orders admitting the Section 9 application, holding that the claims relied upon were time-barred and that the uncrystallised damages could not constitute operational debt. The judgment reinforces the distinction between contractual consideration that has become due and payable and unadjudicated claims for damages, and clarifies that the IBC cannot be used as a substitute for adjudication of unresolved contractual claims.

INTELLECTUAL PROPERTY RIGHTS (IPR)

Regulatory Update

IP India Issues Guidelines for Use of AI in Patent Examination

The Indian Patent Office, on 7 August 2026, issued the Guidelines for the Use of Artificial Intelligence in Patent Examination Procedures, establishing a framework for the use of AI-assisted tools in the examination of patent applications. The guidelines seek to facilitate the use of AI in patent examination while ensuring that the statutory and legal responsibility for examination remains with the designated Patent Examiner.

The guidelines provide for the following key aspects:

Use of AI-assisted tools in patent examination, including for conducting searches and supporting the examination of patent applications.
AI tools may assist examiners in identifying relevant prior art and carrying out other examination-related functions.
The Patent Examiner retains responsibility for the final assessment and decision-making, and AI-generated outputs are not to substitute the examiner's independent application of mind.
The use of AI is intended to improve the efficiency, consistency and effectiveness of patent examination while maintaining the integrity of the examination process.

The issuance of the guidelines marks an important step towards integrating AI-assisted technologies into India's patent examination framework, while preserving human oversight and accountability in decisions concerning the grant or refusal of patents.

International Update

WIPO Launches International Intangible Asset Valuation Network

On 27 August 2026, the World Intellectual Property Organization (WIPO), together with leading organisations from the intellectual property, valuation and commercialisation communities, formally launched the Intangible Asset Valuation Network (IAVN) at Singapore IP Week 2026. The Network brings together WIPO, the International Trademark Association (INTA), the International Valuation Standards Council (IVSC), the Licensing Executives Society International (LESI), the Intellectual Property Office of Singapore (IPOS) and the Institute of Valuers and Appraisers, Singapore (IVAS).

The development forms part of a broader international effort to strengthen practices surrounding the valuation of intangible assets:

The Network will provide a global platform for sharing knowledge and developing practical tools and resources for intangible asset valuation.
It seeks to promote greater international alignment on valuation best practices, while recognising differences across legal, regulatory and commercial environments.
The initiative covers intangible assets including brands, patents, data and other intellectual property-related assets, which increasingly account for a significant share of business value.
The Network is intended to support businesses, investors, policymakers and the wider innovation community by strengthening confidence in the valuation of intangible assets and their role in commercial and financial decision-making.

The launch reflects the growing importance of intangible asset valuation in IP finance, investment and commercialisation, and represents a step towards developing more consistent and trusted approaches to valuing IP and other intangible assets globally.

WHITE COLLAR CRIMES

Notable Judgement

Rafikmiya Ahmedmiya Malek v. State of Gujarat

On 19 August 2026, the Hon’ble Supreme Court acquitted a former Talati-cum-Mantri and a Gram Panchayat Peon in a corruption case under the Prevention of Corruption Act, 1988, holding that the prosecution had failed to prove the demand for bribe beyond reasonable doubt. The Division Bench comprising Justice Ujjal Bhuyan and Justice Atul S. Chandurkar set aside the concurrent findings of conviction recorded by the trial court and the Gujarat High Court.

The case arose from an allegation that the Talati-cum-Mantri had demanded ₹120 from a complainant for issuing an Income Certificate, with ₹100 allegedly intended for himself and ₹20 for the Gram Panchayat Peon. During the subsequent trap proceedings, however, only a ₹20 currency note was found with the Peon. No amount was offered to or recovered from the Talati-cum-Mantri. The Supreme Court found that the prosecution evidence did not establish the alleged demand against either appellant and that the mere possession of the ₹20 note by the Peon was insufficient to sustain the convictions.

The Court reaffirmed that proof of demand is an essential element in establishing an offence under the Prevention of Corruption Act and that mere recovery or possession of tainted currency, by itself, cannot establish guilt. The statutory presumption under Section 20 of the Act cannot be invoked in the absence of proof of the foundational fact of demand. The Court also noted that the sanction for prosecuting the Talati-cum-Mantri suffered from questions concerning the competence of the authority granting it.

The judgment reiterates the importance of establishing the demand for illegal gratification through reliable evidence before a conviction can be sustained under the Prevention of Corruption Act. It also underscores that recovery of currency during a trap operation, without proof of the underlying demand and acceptance, cannot by itself satisfy the prosecution's burden of establishing guilt beyond reasonable doubt.

International Update

United States — DOJ Launches National Fraud Detection Center

On 24 August 2026, the U.S. Department of Justice announced the launch of the National Fraud Detection Center (NFDC), a prosecutor-led, multi-agency initiative designed to detect and investigate complex fraud targeting federal government programmes. The Centre brings together law enforcement agencies, Inspectors General and analytical capabilities to generate criminal leads and strengthen the prosecution of fraud against taxpayer-funded programmes.

The development forms part of a broader effort by the US Department of Justice to strengthen its approach to fraud detection and enforcement:

The NFDC brings together agencies including the FBI, Homeland Security Investigations, IRS Criminal Investigation and FinCEN, along with multiple federal Offices of Inspector General.
The initiative is designed to address fraud schemes that operate across multiple federal programmes by enabling cross-agency data sharing and coordinated investigation, rather than treating individual schemes in isolation.
The Centre will use data-driven analytical capabilities to identify potential fraud and generate investigative leads, including in cases involving actors operating across federal programmes and overseas.
The launch follows the DOJ's 13 August 2026 memorandum on enforcement priorities for its National Fraud Enforcement Division, which emphasised prosecution of fraud affecting the federal government and taxpayer-funded programmes.

The establishment of the NFDC signals a shift towards a more proactive, data-driven and coordinated approach to white-collar fraud enforcement in the United States. Its ability to connect information across tax, trade, healthcare and federal benefit programmes could enable authorities to identify complex or cross-programme fraud schemes earlier and pursue them through coordinated criminal and civil enforcement.

CUSTOMS

Regulatory Update

CBIC Revises Customs Tariff Values for Specified Imports

The Central Board of Indirect Taxes and Customs (CBIC), vide Notification No. 72/2026-Customs (N.T.) dated 31 August 2026, has further revised the prescribed tariff values for specified imported goods under Section 14(2) of the Customs Act, 1962. The notification substitutes Tables 1, 2 and 3 of Notification No. 36/2001-Customs (N.T.) and comes into force with effect from 1 September 2026.

The notification provides for the following revised tariff values:

Edible oils, including crude palm oil, RBD palm oil, other palm oil, crude and RBD palmolein and crude soya bean oil, have been assigned revised tariff values ranging from US$1,214 to US$1,262 per metric tonne.
The tariff value for brass scrap (all grades) has been revised to US$8,162 per metric tonne.
The tariff value for specified gold has been revised to US$1,468 per 10 grams.
The tariff value for specified silver remains at US$2,267 per kilogram, expressly recorded as “no change” in the relevant entry.
The tariff value for areca nuts remains at US$11,574 per metric tonne, also expressly recorded as “no change”.

The notification represents the fourth amendment to the customs tariff values during August 2026, following Notifications Nos. 69/2026 dated 10 August, 70/2026 dated 14 August and 71/2026 dated 25 August. The latest revision, although issued on 31 August 2026, applies from 1 September 2026.

Notable Judgement

Union of India & Ors. v. The Board of Trustees of the Port of Bombay

On 25 August 2026, a Bench of Justices B.V. Nagarathna and Manmohan of the Hon’ble Supreme Court held that a port governed by the Major Port Trusts Act, 1963 may be approved as a “custodian” under Section 45(1) of the Customs Act, 1962, and consequently made liable to pay customs duty on imported goods pilfered while in its custody. The judgment arose from a challenge to the Bombay High Court's decision quashing the Customs Commissioner's notification approving the Mumbai Port Trust as a custodian for the purposes of Section 45 of the Customs Act.

The dispute concerned imported goods that were allegedly pilfered while in the custody of the Mumbai Port Trust, in respect of which Customs authorities had sought recovery of duty under Section 45(3) of the Customs Act. The Bombay High Court had held that the Mumbai Port Trust, being governed by the Major Port Trusts Act, could not be brought within the statutory liability imposed on a custodian under Section 45(3). The Supreme Court disagreed, holding that the liability under the Customs Act is distinct from the civil liability of a port trust for loss or deterioration of goods under the Major Port Trusts Act. The Court specifically distinguished pilferage from ordinary loss or destruction, observing that pilferage is addressed under the Customs Act and therefore attracts the statutory duty liability under Section 45(3).

Allowing the Union government's appeal, the Supreme Court upheld the validity of the 11 October 2000 notification approving the Mumbai Port Trust as a custodian under Section 45(1) of the Customs Act and set aside the Bombay High Court's decision to that extent. At the same time, the Court did not interfere with the quashing of demands relating to periods prior to the notification, as no liability under Section 45(3) could arise before the Port Trust had been formally approved as a custodian. The judgment clarifies the interaction between the Customs Act and the Major Port Trusts Act and reinforces that the statutory liability for customs duty on pilfered imported goods rests with the approved custodian, irrespective of the separate statutory framework governing the port's custody of goods.

International Update

European Commission Updates EU Customs Data Model

On 27 August 2026, the European Commission published an updated version of the EU Customs Data Model (EUCDM), with the release of EUCDM version 7.0.11. The update introduces changes to the data requirements and technical specifications used across EU customs systems and is intended to support greater consistency and interoperability in the exchange of customs information.

The updated model includes several developments:

Alignment of the EU Customs Data Model with World Customs Organization (WCO) Data Model version 4.1 for the relevant Union Customs Code data requirements.
Minor corrections and usability improvements, including clearer presentation of data requirements and corrections to certain inconsistencies with published EU legal texts.
An experimental mapping of selected information-exchange messages to legal data elements, together with a simulation function showing upcoming changes to Annex B data requirements.
Availability of key datasets and code lists in structured XML format, supporting more consistent implementation across customs systems.

The EUCDM provides the common data requirements used for customs declarations, applications and decisions, and the registration of economic operators, and forms the basis for various EU and national customs IT systems.

CONSUMER

Regulatory Update

Karnataka Tightens Food Safety and Hygiene Compliance for Food Businesses

The Commissioner, Food Safety and Drug Administration, Government of Karnataka, issued two advisories dated 11 August 2026 and 20 August 2026, directing hotels, restaurants, dhabas, catering establishments and other Food Business Operators (FBOs) across the State to strengthen compliance with prescribed food safety, hygiene and sanitation requirements. The advisories followed inspections that identified deficiencies in food handling, cleanliness and hygiene and were issued in the interest of public health.

The advisories prescribe a range of compliance requirements, including:

Maintenance of a valid FSSAI licence or registration and compliance with the conditions attached to it.
Procurement of raw materials from reliable sources, appropriate storage and temperature controls, and immediate segregation and disposal of expired, spoiled or unsafe food.
Maintenance of hygienic kitchens and premises, including appropriate infrastructure, separate sinks and measures to prevent cross-contamination between vegetarian and non-vegetarian food.
Compliance with requirements relating to pest control, personal hygiene, medical fitness and food-safety training of food handlers.
Use of safe and potable water and ice, proper transportation and temperature control of food, and compliance with applicable packaging and labelling requirements.
Appropriate disposal of food waste and used cooking oil, together with maintenance of records relating to procurement, storage, cleaning, pest control, training, medical fitness and water testing.

The 20 August 2026 advisory requires FBOs to rectify deficiencies identified during inspections within 15 days from the date of issuance, following which Food Safety Officers will conduct re-inspections. The advisory further states that continued or unrectified violations may result in legal action under the Food Safety and Standards Act, 2006 and the applicable regulations.

The advisories mark a significant tightening of food-safety compliance and enforcement in Karnataka, placing greater emphasis on preventive controls, documentation and demonstrable compliance by food businesses. The development is particularly relevant from a consumer-protection perspective, as non-compliance with the prescribed standards may expose food businesses to regulatory action while strengthening safeguards relating to food quality, hygiene and consumer health.

Notable Judgement

Avon Elastomers (India) v. Bajaj Allianz General Insurance Co. Ltd.

In an order passed in August 2026, the Hon’ble Supreme Court sought the Union Government's response on the appropriate basis for determining the pecuniary jurisdiction of consumer fora under the Consumer Protection Act, 2019. The issue arose in proceedings concerning whether the jurisdiction of a consumer commission should be determined by the value of the goods or services paid as consideration by the consumer, or by the amount of compensation claimed in the complaint.

The Court identified several practical anomalies arising from the consideration-based test under the 2019 Act. These included situations involving fixed deposits and savings accounts, subsidised medical services, defects in fixtures and fittings, and defective components of high-value vehicles, where the value of the consideration paid may not necessarily correspond with the value of the dispute or the compensation sought. The issue has gained further significance following the reduction of the pecuniary jurisdiction of the National Consumer Disputes Redressal Commission from ₹10 crore to ₹2 crore under the revised jurisdictional framework.

The Supreme Court, comprising Justices K.V. Viswanathan and Arun Palli, directed the Union Government to file an affidavit within six weeks addressing the anomalies identified by the Court and the appropriate approach to determining pecuniary jurisdiction. The proceedings could have significant implications for the forum before which consumer complaints are instituted, particularly in cases where the amount paid as consideration differs substantially from the compensation or relief claimed.

International Update

United States — FTC Proposes Enforcement Policy on Personalised Pricing

On 19 August 2026, the U.S. Federal Trade Commission (FTC) announced a proposed enforcement policy concerning personalised pricing, under which businesses may use consumers' personal data to determine the price an individual consumer is likely to be willing to pay. The proposed policy states that where consumers reasonably expect prices not to vary based on their personal data, businesses engaging in personalised pricing should clearly and conspicuously disclose that the price is personalised, the basis for the personalisation and the types of data used.

The proposed policy focuses on several aspects of personalised pricing:

Businesses may use personal data and information about consumer behaviour to estimate an individual's willingness to pay or likelihood of comparison shopping.
The FTC states that it does not have authority to prohibit personalised pricing in all circumstances, but may take enforcement action where the practice constitutes an unfair or deceptive act or violates another law enforced by the Commission.
Businesses using personalised pricing should disclose that the price is personalised, the basis for personalisation and the categories of personal data used where consumers would reasonably expect uniform pricing.
The FTC has invited public comments on the proposed enforcement policy, with comments due 18 September 2026.

The proposed policy reflects growing regulatory scrutiny of the use of consumer data and algorithmic decision-making in pricing, particularly where consumers may be unaware that their browsing history, purchasing behaviour or other personal information is influencing the price offered to them. It signals a broader consumer-protection focus on transparency in data-driven pricing practices.

The content provided in this update is for educational and informational purposes only and should not be construed as legal advice or opinion. Lex Alliance, Advocates & Legal Consultants, will not be liable in connection with the use of this information without seeking appropriate legal counsel