The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to customize pricing for individual consumers.
Eight companies from various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—received inquiries from the FTC, which aims to examine how these pricing strategies affect privacy, competition, and consumer protections.
These companies utilize data-driven tools, including AI, for a practice referred to as “surveillance pricing” or “dynamic pricing.” This method allows different prices to be presented to consumers for identical products based on their attributes or actions, such as location, demographics, credit history, and online shopping behavior.
Many of the firms approached by the FTC are significant players offering transaction, sales, and pricing services to large corporations both in the U.S. and globally. For instance, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks. Revionics supplies retail pricing optimization software and analytics to several global retailers, including Home Depot. Pros, which provides AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines and collaborates with Microsoft on technological developments.
The FTC aims to investigate the “opaque market” where consumer profiling occurs to set specific prices for products and services. FTC Chair Lina Khan highlighted concerns, 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 seeking information in four main areas: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales data, and how these surveillance practices impact the prices that customers pay.