The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their practices related to customer data, algorithms, and artificial intelligence used to customize pricing for consumers.
Eight firms from various sectors — including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros — have been issued subpoenas by the FTC. The agency seeks insights into how these pricing strategies affect privacy, competition, and consumer protection.
Companies utilize data-driven tactics, referred to as “surveillance pricing” or “dynamic pricing,” to offer different pricing for the same products based on individual consumer traits or behaviors. Factors can include geographic location, demographics, credit history, and shopping patterns.
Many of the companies under scrutiny by the FTC provide pivotal pricing, transaction, and sales services to some of the largest corporations both in the United States and globally. Task Software is known for its transaction management services for major hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization tools and analytics for major chains including Home Depot. Pros, which markets itself as an AI-powered solutions provider for pricing, has high-profile clients such as Nestlé, HP, and United Airlines, and is a technological development partner for Microsoft.
The FTC aims to investigate what it describes as an “opaque market” that categorizes customers and assigns targeted pricing for various products and services.
FTC Chair Lina Khan highlighted the risks posed by companies that exploit personal data, saying, “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 FTC’s investigation will focus on four main aspects: the types of surveillance pricing solutions offered by each company, their data collection methods, customer and sales data, and how these surveillance activities impact the prices consumers ultimately pay.