The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their methods of using customer data, algorithms, and artificial intelligence to set personalized pricing.
The regulatory body has issued inquiries to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking insights on how these practices affect privacy, competition, and consumer protection.
These companies employ “surveillance pricing,” also referred to as “dynamic pricing,” which allows them to display varying prices for the same products based on individual consumer characteristics or behaviors, such as location, demographics, credit history, and online activity.
Many of the firms involved provide transaction, sales, and pricing services to major U.S. and global businesses. For example, Task Software manages transactions for notable hospitality clients like McDonald’s and Starbucks. Revionics specializes in retail price optimization software and analytics for various international chains, including Home Depot. Pros, which promotes itself as an AI-driven pricing solutions provider, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft.
The FTC aims to clarify this complex market that categorizes shoppers and applies targeted pricing strategies. FTC Chair Lina Khan emphasized the risks of compromising consumer privacy, stating that companies could be taking advantage of extensive personal data to impose higher prices. She indicated that the agency’s inquiry seeks to uncover whether these businesses are leveraging detailed data to implement surveillance pricing, which involves a network of pricing intermediaries.
The FTC is requesting information regarding four main aspects: the types of surveillance pricing products and services offered, data collection methods, customer and sales data, and the influence of these practices on the prices consumers pay.