The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their practices in using customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The inquiry targets eight firms across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies have been directed by the FTC to provide insights into how their pricing tactics affect privacy, competition, and consumer protection.
Companies utilize data tools, including AI, in a practice referred to as “surveillance pricing” or “dynamic pricing,” which allows them to offer different prices for the same products based on specific consumer attributes, such as location, demographics, credit history, and purchasing behavior.
Many of the firms subject to the FTC’s scrutiny supply transaction, sales, and pricing services to some of the largest U.S. and global corporations. Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics supplies pricing optimization software to retail giants, including Home Depot. Additionally, Pros is known for its AI-driven pricing solutions, serving clients such as Nestlé, HP, and United Airlines, and partners with Microsoft for technology development.
The FTC aims to investigate this “opaque market” that classifies shoppers and establishes tailored prices for products and services. FTC Chair Lina Khan emphasized in a statement, “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 FTC is specifically seeking information on four critical areas: the types of surveillance pricing products and services provided, data collection methods, customer and sales information, and the impact of these surveillance practices on the prices customers pay.