The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their utilization of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight companies from diverse sectors — Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros — were served with information requests by the FTC on Tuesday. The agency seeks insights into the implications of these pricing practices on privacy, competition, and consumer protection.
These businesses leverage data tools, particularly AI, to implement “surveillance pricing” or “dynamic pricing,” which allows them to present different prices for identical products based on various consumer attributes such as location, demographics, credit history, and online shopping behavior.
Many of the entities under investigation provide transaction, sales, and pricing services to leading companies both in the United States and globally. Task Software, for example, manages transactions for several major hospitality brands, such as McDonald’s and Starbucks. Revionics specializes in retail price optimization and pricing analytics for prominent chains, including Home Depot. Pros, known for its AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines and is also a technology partner of Microsoft.
The FTC aims to unravel the complexities of this “opaque market” that sorts shoppers and assigns targeted pricing for various products and services.
“Companies that collect personal data from Americans could jeopardize their privacy. They might be taking advantage of this vast amount of personal information to charge individuals higher prices,” stated FTC Chair Lina Khan. “Americans have the right to know whether businesses are employing intricate consumer data to implement surveillance pricing, and the FTC’s inquiry will illuminate this obscure network of pricing intermediaries.”
The FTC is particularly interested in four main areas: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales information, and the influence these practices have on customer pricing.