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.
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The FTC issued orders to eight companies — Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros — on Tuesday, seeking insights into how these pricing methods affect privacy, competition, and consumer protection.
These companies utilize data-driven techniques, often referred to as “surveillance pricing” or “dynamic pricing,” which display varying prices for the same products based on specific consumer traits or behaviors, such as location, demographics, credit history, and online activity.
Several firms contacted by the FTC play vital roles in providing transaction, sales, and pricing services to some of the largest businesses domestically and internationally. Task Software facilitates transaction management for significant hospitality brands like McDonald’s and Starbucks. Revionics delivers pricing optimization software to major retail chains including Home Depot. Pros specializes in AI-driven pricing solutions and works with clients such as Nestlé, HP, and United Airlines, while also partnering with Microsoft in technology development.
The FTC aims to unravel the complexities of this “opaque market” where shoppers are categorized and charged differently for products and services.
“Companies that collect personal data from Americans risk compromising their privacy. They might exploit this extensive personal information to impose higher prices,” stated FTC Chair Lina Khan. “Consumers have the right to understand whether businesses are utilizing detailed consumer data for surveillance pricing, and our investigation will provide clarity on this obscure network of pricing intermediaries.”
The agency is focusing on four primary areas: the specific surveillance pricing products and services offered by each company, methods of data collection, customer and sales information, and the impact of these practices on the pricing consumers ultimately face.