The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their methods of utilizing customer data, algorithms, and artificial intelligence for personalized pricing.
The inquiry targets eight firms from varying industries, which include Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies received requests from the FTC for data on how their pricing strategies affect privacy, competition, and consumer protection.
Utilizing tools such as artificial intelligence, these companies engage in practices known as “surveillance pricing” or “dynamic pricing,” where different prices are presented to consumers based on specific characteristics or behaviors, including location, demographics, credit history, and online activity.
Many of the firms being investigated offer transaction, sales, and pricing services to major corporations both in the United States and internationally. Task Software, for example, manages transactions for well-known hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization and analytics, serving large chains like Home Depot. Pros provides AI-driven pricing solutions and counts companies such as Nestlé, HP, and United Airlines as clients, while also partnering with Microsoft for technology development.
The FTC aims to clarify the complexities of an “opaque market” that profiles consumers and sets targeted pricing for goods and services.
“Companies that collect personal data from Americans can jeopardize their privacy. There is a risk that these companies may exploit the extensive personal information they hold to charge individuals higher prices,” stated FTC Chair Lina Khan. “Americans have the right to understand whether businesses are leveraging detailed consumer data for surveillance pricing, and the FTC’s investigation will provide insight into this murky pricing landscape.”
The FTC is seeking information on four primary aspects: the types of surveillance pricing products and services offered, the data collection methods employed, customer and sales data, and the effect these practices have on pricing for consumers.