The Federal Trade Commission (FTC) has initiated an investigation involving several prominent companies regarding their usage of customer data, algorithms, and artificial intelligence to implement personalized pricing strategies.
The agency has issued information requests to eight companies: Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC is examining how these practices affect consumer privacy, competition, and protection.
These companies employ techniques known as “surveillance pricing” or “dynamic pricing,” which allows them to present varying prices for the same products based on individual consumer factors such as location, demographics, credit history, and browsing or shopping habits.
Many of the organizations under scrutiny provide essential transaction, sales, and pricing services to leading corporations both nationally and internationally. Task Software, for instance, manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics offers pricing analytics and optimization software to large retailers, including Home Depot. Pros, positioning itself as a provider of AI-driven pricing solutions, serves clients including Nestlé, HP, and United Airlines and partners with Microsoft in technology development.
The FTC aims to investigate what it describes as an “opaque market” that categorizes consumers and sets tailored prices for goods and services. FTC Chair Lina Khan highlighted concerns, stating that companies collecting personal data from Americans could risk their privacy and potentially exploit such information to impose higher prices. She emphasized the need for transparency regarding whether businesses utilize detailed consumer data for surveillance pricing.
The FTC is seeking details on four main areas: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales data, and the impact of these practices on the prices consumers ultimately pay.