Tinder has been found operating with unfair pricing in the Netherlands and few other countries. A new research shows that the popular dating app has been charging some users as much as five times for the same service. The unfair pricing comes into light amidst an ongoing lawsuit in California, where Tinder is being investigated for unfair pricing based on age.
Tinder Plus and its unfair pricing model in the Netherlands
A new research from the Mozilla Foundation Consumers International shows that Tinder Plus users are being charged different prices for exactly the same services. In the Netherlands, the Dutch users of Tinder Plus, the subscription service offering features like unlimited likes, unlimited rewinds, and an ad-free experience, are being charged anywhere between $4.45 (€3.90) and $25.95 (€22.76).
The parity in pricing, as found by the research, does not bring any additional features. It means those paying €3.90 and those paying €22.76 for Tinder Plus in the Netherlands get the exact same features and experience. The research also notes that the pricing ranged from $4.99 to $26.99 in the US.
The Mozilla Foundation and Consumers International analysed Tinder Plus pricing in six countries: Brazil, India, New Zealand, the Netherlands, the Republic of Korea, and the United States of America. It found that Tinder’s personalised pricing algorithm can discriminately charge older users more money than their younger counterparts. Across the six countries investigated, the research found those in the age group of 30 to 49 being charged 65.3 per cent more than those in the age group of 18 to 29.
This difference in pricing across age groups was the highest in the Netherlands, the Republic of Korea, and India. The research also found that consumers were quoted 31 unique price points in the Netherlands, which was highest among all the six countries where the pricing was evaluated.
While Tinder‘s personalised pricing based on age was conclusive, the research found that personalised pricing based on gender or sexual preference was less conclusive. In the Netherlands, heterosexual participants quotes an average of 10.6 per cent more than homosexual participants. A larger sample size could lead to a clearer picture whether Tinder considers gender or sexual preference for its variable pricing.
A spokesperson for Tinder told Engadget that the report is “deeply flawed and contains completely false and outrageous allegations” without elaborating on these claims.
Personalised pricing and methodology of the research
Personalised pricing is a form of price discrimination where some platforms can set prices at a different level for each individual consumers. This pricing is often reached on the basis of an “estimation of what they are willing and able to pay”. The researchers note that advances in data collection and use of algorithms has expanded the ability of companies to effectively use personalised pricing.
While personalised pricing remains prevalent among platforms, there is not enough research on which platforms abuse this model. The research into Tinder’s personalised pricing builds on work by CHOICE, which investigated the dating platform’s pricing in Australia in 2020.
“Personalised pricing isn’t inherently harmful to consumers if done fairly, responsibly, and transparently. But our research reveals Tinder’s algorithm is unfair, irresponsible, and opaque,” says Ashley Boyd, VP of Advocacy at Mozilla.
“Opaque 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,” she adds.
The research conducted by Consumers International in partnership with the Mozilla Foundation is a case study on Tinder Plus, the premium service offered by Tinder. The research adopts the same methodology that CHOICE used for its look into Tinder’s personalised pricing in Australia. The research focused on six countries – New Zealand, the USA, the Netherlands, the Republic of Korea, India, and Brazil – and surveyed participants between May and September 2021.
For its research, the Mozilla Foundation and Consumers International selected 96 mystery shoppers in each country, with 50 per cent men and 50 per cent women. The participants were also selected based on their sexual preference with 50 per cent heterosexual and 50 per cent homosexual. The participants were also evenly split based on age brackets of 18-29, 30-49 and over 50 years old. Lastly, they selected 70 per cent participants from metropolitan locations while the remaining 30 per cent came from regional areas. The Republic of Korea, with only a 48 person sample, remains an exception.
These mystery shoppers then signed up for Tinder Plus by providing Tinder with personal factors such as sex and location. They then shared their price quotes with the researchers. Out of 598 people surveyed, 97 per cent reported some level of concern about personalised pricing practice. 83 per cent of the people surveyed favoured an option to opt out of such a practice.
Helena Leurent, Director General at Consumers International, says, “Consumers must be given greater agency over the use and dissemination of their personal data collected for personalised pricing purposes, while measures must be introduced to uphold data protections for all.”
Is personalised pricing illegal?
Personalised pricing is not illegal but a strong data protection regulation could deter platforms like Tinder from engaging in such a practice. Consumer protection laws like GDPR could provide a basis for action. There is also an argument among experts that anti-discrimination and equality laws could be used against unfair personalised pricing.
The latter will force tech companies and platform providers to ensure that protected or vulnerable populations are not charged higher prices. The research concludes that while this practice is common, consumers are rarely aware that they have been targeted in this way, which makes anti-discrimination cases against companies difficult.
This week, Tinder announced an update to its premium features to expand its a la carte features beyond Super Like and Boost. The online dating platform revealed that it plans to offer popular subscription features like ‘See Who Likes You’ and ‘Passport’, on an a la carte basis. “We think the combination of Tinder Coins as a method of payment and an expanded set of a la carte features will give all our members far more ways to find a Tinder experience that fits their budget and their needs,” the company said.
The research by Mozilla Foundation and Consumers International argues that consumers should demand for better transparency on data collection and data use by online platforms. There is also an argument in favour of empowering consumer protection agencies around the world. Lastly, there is a need to advance equality and anti-discrimination laws.