The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
On Tuesday, the FTC directed requests for information to eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency aims to understand the implications of these pricing strategies on privacy, competition, and consumer protection.
The practice, often referred to as “surveillance pricing” or “dynamic pricing,” involves utilizing data tools such as AI to display varying prices to consumers for identical products based on their characteristics or behaviors. These factors can include location, demographics, credit history, and online shopping behavior.
Many of the companies under scrutiny by the FTC provide transaction, sales, and pricing services to major companies both in the U.S. and worldwide. Task Software plays a central role in transaction management for numerous hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization software and pricing analytics used by global chains such as Home Depot. Meanwhile, Pros, which offers AI-driven solutions for pricing, lists clients like Nestlé, HP, and United Airlines, and holds a technology development partnership with Microsoft.
The FTC is probing the features of this “opaque market” that enables firms to categorize shoppers and set targeted prices for their offerings.
“Businesses that collect personal data from Americans pose risks to privacy, and they might be taking advantage of this wealth of data to impose higher prices,” stated FTC Chair Lina Khan. “Americans deserve clarity on whether detailed consumer data is being used for surveillance pricing, and our inquiry aims to illuminate this hidden network of pricing intermediaries.”
The Commission is seeking information in four primary areas: the types of surveillance pricing products and services offered by each company, data collection methods, customer and sales information, and the influence of these surveillance practices on the pricing consumers ultimately pay.