The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their utilization of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight companies across various sectors—including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—received requests from the FTC for information about the implications of these pricing strategies for privacy, competition, and consumer protection.
These businesses employ techniques known as “surveillance pricing” or “dynamic pricing,” which enable them to present different prices to consumers for identical products based on characteristics such as location, demographics, credit history, and shopping habits.
Many of the firms contacted by the FTC offer transaction, sales, and pricing services to some of the largest enterprises in the United States and internationally. Task Software, known for managing transactions for major hospitality brands like McDonald’s and Starbucks, is one of the firms involved. Revionics supplies retail price optimization tools and pricing analytics to global retailers, while Pros, which markets itself as a provider of AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines. Pros is also a technology partner with Microsoft.
The FTC aims to investigate this “opaque market” that profiles consumers and adjusts prices for goods and services accordingly.
“Companies that collect personal data from Americans might be jeopardizing individuals’ privacy. They could also be using this extensive data to impose higher prices,” stated FTC Chair Lina Khan. “Americans should be informed if businesses are leveraging detailed consumer data to implement surveillance pricing, and the FTC’s inquiry will illuminate this obscure system of pricing intermediaries.”
The FTC’s inquiry focuses on four primary areas: the types of surveillance pricing products and services offered by each company; methods of data collection; customer and sales information; and the impact of these surveillance practices on the prices customers ultimately pay.