Ecommerce is the emerging trend of making a purchase. Everything seems to be equal when it comes to the pricing of the goods or services we are made available with. However, are they the same all over the world? Price discrimination has always been an issue in the society we live in. People pay different prices for the same product. Let’s find out what exactly the meaning of the term price discrimination is and how it is been done.
Price discrimination is the practice of charging a different price for the same goods and services. There are three types of price discrimination- first-degree, second-degree, and third-degree price respectively. Many times customers are charged an extra amount in the name of extra services provided even though the Maximum Retail Price (MRP) includes the cost of that service in it. The first –degree price discrimination occurs when a firm charges a different price for every bit consumed. However, this type of discrimination is rare. Second-degree discrimination occurs when the firm charges different prices for the different quantity purchased. Third-degree discrimination occurs when the firm charges different prices for different groups of customers.
Price discrimination is more common in online sites. In order to know how much price discrimination is being done online, Chriso Wilson, an assistant professor of Computer Science at Northeastern University developed an extension to check the sites such as Amazon, Google flights, and Priceline Hotels through the most used internet browser namely Google Chrome. However, on doing the research it was found that there is more price steering rather than price discrimination on these sites. A service is being developed which, when installed by the users, can identify and compare the prices they are paying for a particular product over all other sites where the product is available. This type of extension can help the average web browsers to better understand and be aware of the practice of price discrimination.
Price discrimination is a wrong practice done by the sellers in order to survive in the market for a longer period of time. This practice needs to be stopped so that everyone receives equivalent service by paying an equal price irrespective of their class. We, as consumers, are the first ones to take steps against such practices. We can exercise our right to equality whenever we witness or are targeted by such practices. We should report to the consumer court against such practices.