The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their use of customer data, algorithms, and artificial intelligence in personalized pricing strategies.
Among the companies under scrutiny are Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC issued orders to these eight firms, seeking details about how their pricing practices affect privacy, competition, and consumer protection.
These companies utilize data-driven tools, including AI, to implement practices known as “surveillance pricing,” or “dynamic pricing,” which enables them to offer varying prices for the same products based on individual characteristics or behaviors. Factors such as location, demographics, credit history, and online shopping habits can influence these customized prices.
Many firms receiving inquiries from the FTC provide key transaction, sales, and pricing solutions to some of the largest businesses in the United States and around the world. Notably, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics specializes in retail price optimization software for global chains like Home Depot. Pros, which markets itself as an AI-driven pricing solutions provider, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft as a technology partner.
The FTC is probing the complexities of what it describes as an “opaque market” that categorizes consumers and assigns targeted pricing for goods and services.
“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,” said FTC Chair Lina Khan in a statement. “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’s investigation seeks insight into four primary areas: the types of surveillance pricing products and services offered by each company, their methods of data collection, customer and sales information, and the influence of these practices on the prices consumers ultimately pay.