The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their utilization of customer data, algorithms, and artificial intelligence for tailored pricing strategies.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received inquiries from the FTC on Tuesday. The commission aims to understand how these practices affect privacy, competition, and consumer protection.
These companies employ a tactic known as “surveillance pricing,” also referred to as “dynamic pricing,” which allows them to present different prices for the same products to consumers based on various factors such as location, demographics, credit history, and browsing activity.
Many of the firms contacted provide transaction, sales, and pricing services to major corporations in the U.S. and internationally. Task Software manages transactions for notable hospitality brands, including McDonald’s and Starbucks. Revionics offers retail price optimization and analytics for global chains like Home Depot. Pros, which markets AI-powered pricing solutions, counts Nestlé, HP, and United Airlines among its customers and collaborates with Microsoft on technology development.
The FTC is seeking clarification on this “opaque market,” which categorizes consumers and determines targeted pricing for products and services.
FTC Chair Lina Khan commented, “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 agency is focusing on four main areas of inquiry: the types of surveillance pricing products and services offered, the methods of data collection, customer and sales information, and the influence of these practices on the prices customers ultimately pay.