The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their usage of customer data, algorithms, and artificial intelligence in personalized pricing strategies.
On Tuesday, the FTC issued orders to eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking insights into how these pricing methods affect privacy, competition, and consumer protection.
Utilizing data-driven tools such as AI, these companies engage in a practice known as “surveillance pricing,” also referred to as “dynamic pricing,” where different prices are presented to consumers for the same products based on various factors such as location, demographics, credit history, and online behaviors.
Many of the implicated firms supply transaction, sales, and pricing services to prominent U.S. and global corporations. Task Software is recognized for its role in transaction management for major hospitality entities like McDonald’s and Starbucks. Revionics specializes in retail price optimization software and analytics for several large chains, including Home Depot. Additionally, Pros, which promotes AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines, and collaborates with Microsoft as a technology development partner.
The FTC’s investigation aims to clarify the “opaque market” that profiles consumers and applies specific pricing for products and services. FTC Chair Lina Khan emphasized the risks associated with companies that exploit personal data, stating, “Firms that harvest Americans’ personal data can put people’s privacy at risk. Now firms could be exploiting this vast trove of personal information to charge people higher prices. Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing, and the FTC’s inquiry will shed light on this shadowy ecosystem of pricing middlemen.”
The agency is specifically seeking information in four primary areas: the types of surveillance pricing products and services offered by each company, the methods of data collection, customer and sales details, and the influence of these pricing practices on the costs customers ultimately face.