The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies. This inquiry targets eight firms across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC has issued requests for information concerning how these practices affect consumer privacy, competition, and protection.
The companies in question utilize data tools, particularly AI, to engage in what’s known as “surveillance pricing” or “dynamic pricing.” This method allows businesses to show different prices to consumers for the same products based on individual characteristics or behaviors, which may include location, demographics, credit histories, and online shopping habits.
Notably, many of these firms supply transaction, sales, and pricing services to significant players in the U.S. and international markets. For instance, Task Software manages transactions for prominent hospitality brands including McDonald’s and Starbucks. Revionics specializes in retail price optimization software and offers analytics for global chains like Home Depot. Pros, which promotes its AI-powered pricing solutions, serves clients such as Nestlé, HP, and United Airlines and collaborates with Microsoft in technology development.
The FTC aims to clarify this “opaque market” that creates consumer classifications and imposes targeted pricing strategies. FTC Chair Lina Khan emphasized that companies that collect personal data may jeopardize privacy and could potentially exploit this information by charging higher prices. She noted the importance of public awareness regarding whether businesses utilize detailed consumer data to implement surveillance pricing, asserting that the inquiry will expose the hidden dynamics of pricing intermediaries.
The agency is specifically seeking insights into four main areas: the surveillance pricing products and services offered by each company, their data collection methods, customer and sales data, and the impact of these surveillance practices on the prices consumers ultimately pay.