Need to know
- Tinder charges customers wildly different prices for some features – and customers are none the wiser
- The dating platform doesn't tell customers that it uses their personal information to tailor prices
- There are four basic principles we believe companies should meet when they're using your data
We've all heard about the online dating cliches: he said he was 6'3" but was actually a foot shorter. She said she was a doctor but is actually unemployed. He lied about having kids.
No one wants to be caught out expecting one thing and then find out it wasn't true.
Online dating app Tinder is a master at this bait and switch. The app promises that it will be "transparent in the way we process your data" but fails to tell customers that they will pay a different price than others based on their personal data.
Tinder's hyper-personalised pricing
Without letting customers know, Tinder charges wildly different prices to different groups of people.
Our mystery shop of Tinder Plus found that the company charged between $6.99 to $34.37 to subscribe to the premium service for one month. One subscriber can be charged up to five times as much as another.
Prices varied by age. On average, people over the age of 30 were offered prices that were more than double the prices given to those who were under 30.
One subscriber can be charged up to five times as much as another
But there were also wild price variations within age groups, ranging from $6.99 to $16.71 in the under-30 group and $14.99 to $34.37 for people over 30.
We can't say for certain with our sample size of 60 Tinder users, but prices could also be affected by any of the other data points we know Tinder has: your sexuality, gender, where you went to school, location or your personal interests.
This heavily personalised pricing approach is great for companies as they maximise how much they can encourage someone to spend. But it's terrible for customers. We can't meaningfully compare prices with similar products and we may be asked to unfairly pay more because of factors out of our control like our age, sexuality or gender.
Time for companies to come clean about how they use your data
So, we don't know exactly how Tinder sets its prices. They won't tell us, even after our investigative journalist requested the information multiple times. They won't even let their customers know they'll pay a different price to someone else.
Tinder has a lot of data. In the sign-up process the app asks for personal information like age, sexuality, gender, where you went to school and what you like to do with your free time.
Then there's the data you don't hand over to them directly: what they learn from large groups of customers who may be similar to you or data on browsing habits they receive from third parties.
Tinder is able to manipulate customers into paying more without them even knowing
Tinder customers are not told what data about them may be used, where it was sourced, if it is accurate or how it is being used. The company is in control. Not the customer. Tinder is more powerful because of this. It is able to manipulate customers into paying more without them even knowing.
At CHOICE, we think this lack of information is so egregious that Tinder may be breaching the Australian Consumer Law.
Tinder's privacy policy and terms of use goes into great detail about what data it collects and how it is used. Not once does Tinder mention that it uses personal information to inform the range of prices available to customers. It's misleading by omitting one very important fact: this company will use your data against you.
We need companies to be ethical when they use our data
It doesn't matter what Tinder intended when it programmed its pricing algorithm, what matters is the impact on customers.
From our mystery shop we know that Tinder is asking older Australians to pay more for dating services. And while the pattern isn't as clear for other factors, it could feasibly be using data to make people pay more based on gender, sexuality or location.
Without more transparency from Tinder we cannot confirm if groups of people are facing unfair discrimination.
You deserve to know exactly how a company uses your data
Tinder is a dating app. It's perfectly reasonable for the company to know your age, sexuality, gender and location to offer you the service. But you deserve to know exactly how a company uses your data. That way you can choose to use a competitor; finding another service that treats you better.
Our ability to make a meaningful, informed choice is removed when companies fail to be transparent about how prices are set.
Solutions when the data horse has bolted
We need to evolve our laws for data protections to capture how companies are using data, not just how they access and store this information.
Our consumer regulator, the ACCC, has called for stronger privacy laws for the modern data-driven era, but privacy reforms alone won't address the root cause of this problem. We need stronger privacy laws to put customers in control but also something much bigger: we need companies to act ethically when they use the data they have.
We need stronger privacy laws, but we also need companies to act ethically when they use the data they have
What does ethical use of data actually involve? This is a debate that feels like it's just begun. There are amazing thinkers in this field but little awareness among policymakers and politicians about the issues and the need for reform.
At CHOICE, we think there are four basic principles that companies should meet when they're using your data.
Companies should:
- Be transparent about how they use consumer data
- Make it clear how customers can control what information is kept and used
- Make prices easily accessible to all customers to allow real competition, and
- Treat customers fairly by making sure no one is unfairly discriminated against.
If companies meet these basic requirements, we can trust them with our personal information.
Stock images: Getty, unless otherwise stated.
