The Dark Side of Personalized Airline Ticket Pricing

The pricing process, which was previously carried out manually by humans, is now increasingly being handed over to systems capable of processing millions of data inreal-time. The dynamic pricing approach provides high efficiency for businesses in adjusting prices based on demand, availability, and market factors. However, behind these benefits, important challenges arise regarding transparency and consumer protection in the digital economy era.

Algorithm machine learning in dynamic pricing not only responds to fluctuations in supply and demand in a conventional manner. This system often utilizes various types of data, including user location, search history, behavioral patterns, and device characteristics. The aim is to optimize revenue through market segmentation based on estimated willingness to pay (willingness to pay).

This kind of practice is essentially a legitimate business strategy in a market economy, as long as it does not create distortions of competition or unfair treatment. However, when the decision-making process lacks transparency—for example, due to the use of device fingerprinting techniques or personal data analysis—information asymmetry between businesses and consumers can occur. Consumers find it difficult to understand the basis for the prices they receive, raising questions about algorithm accountability.

Law Number 5 of 1999 concerning the Prohibition of Monopolistic Practices and Unfair Business Competition (Law Number 5 of 1999), specifically Article 19 letter d, prohibits business actors from discriminating in the provision of goods or services that may result in unfair business competition. Although this law was created in the pre-digital era, its principles can be interpreted progressively to include forms of indirect discrimination based on algorithms, as long as there is proven impact on competition.

Meanwhile, Law Number 27 of 2022 concerning Personal Data Protection (PDP Law) emphasizes the principles of transparency, legality, and accountability in the processing of personal data. The use of data for price personalization without an adequate explanation mechanism (right to explanation) has the potential to conflict with the spirit of this law. Constitutionally, this can also be linked to Article 27 paragraph (1) and Article 28D paragraph (1) of the 1945 Constitution which guarantees equality before the law and protection from discrimination.

As of March 2026, Indonesia still faces a void in specific regulations regarding artificial intelligence. The Presidential Regulation on AI Ethics being prepared by the government is soft law, emphasizing ethical governance, transparency, and accountability without strict administrative sanctions. This condition poses challenges for supervisory institutions such as the KPPU and the Ministry of Transportation in overseeing the implementation of algorithms dynamic pricing.