The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing strategies.
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On Tuesday, the FTC issued orders to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking information about the implications of these pricing strategies on privacy, competition, and consumer protection.
Companies utilize data tools such as artificial intelligence for a practice known as “surveillance pricing” or “dynamic pricing,” which presents different price points for the same products based on various factors like location, demographics, credit history, and online behavior.
Many of the firms targeted by the FTC provide key transaction, sales, and pricing services to major corporations both in the United States and internationally. Task Software manages transactions for well-known hospitality brands like McDonald’s and Starbucks, whereas Revionics offers pricing analytics software to global retailers like Home Depot. Pros, which markets itself as an AI-driven pricing solution provider, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to investigate the “opaque market,” where consumer categorization and targeted pricing practices occur.
FTC Chair Lina Khan stated, “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 particularly interested in four areas: the types of surveillance pricing products and services offered by these companies, their data collection methods, customer and sales information, and the impact of these surveillance practices on the prices consumers pay.