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.
On Tuesday, the regulatory agency issued orders to eight companies across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC seeks to understand how these pricing strategies affect privacy, competition, and consumer protections.
These businesses employ a technique known as “surveillance pricing” or “dynamic pricing,” which enables them to present different prices for the same products based on consumers’ specific attributes or behaviors. Factors that may influence these prices include location, demographics, credit history, and online shopping habits.
Many of the firms being investigated provide transaction, sales, and pricing solutions to significant corporate entities both in the United States and internationally. For instance, Task Software manages transactions for major hospitality clients such as McDonald’s and Starbucks, while Revionics offers pricing optimization tools for retailers like Home Depot. Pros, known for its AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines, and collaborates with Microsoft as a technology partner.
The FTC aims to unravel the complexities of what it describes as an “opaque market,” where consumers are categorized and charged tailored prices for products and services.
FTC Chair Lina Khan commented, “Companies that collect vast amounts of personal data from Americans can put individuals’ privacy at risk. There is concern that these companies might be using this extensive personal information to impose higher prices. Consumers have a right to know if their personal data is being utilized for surveillance pricing, and the FTC’s investigation intends to illuminate the concealed networks involved in this pricing strategy.”
The agency is seeking detailed information in four primary areas: the types of surveillance pricing services offered by each company, methods of data collection, customer and sales data, and the effect these pricing practices have on the final costs consumers face.