The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their use of customer data, algorithms, and artificial intelligence to tailor pricing strategies.
Eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received information requests from the regulatory agency on Tuesday. The FTC aims to understand the implications of these pricing methods on privacy, competition, and consumer protection.
These companies utilize data tools, including AI, in a practice often referred to as “surveillance pricing” or “dynamic pricing.” This approach allows businesses to present varying prices to consumers for identical products based on individual characteristics or behaviors such as location, demographics, credit history, and online browsing or purchasing habits.
Many of the companies contacted by the FTC provide transactional, sales, and pricing services to leading firms both in the U.S. and worldwide. Task Software, for instance, is known for handling transaction management for major hospitality entities like McDonald’s and Starbucks. Revionics specializes in retail price optimization and analytics for various global brands, including Home Depot. Furthermore, Pros offers AI-driven pricing solutions and counts clients like Nestlé, HP, and United Airlines, and also partners with Microsoft for technology development.
The FTC is probing into what it describes as an “opaque market” where consumers are categorized and charged targeted prices for goods and services.
“Companies that collect personal data from Americans pose risks to their privacy. They might be using this extensive amount of personal information to impose higher prices,” stated FTC Chair Lina Khan. “Americans have the right to understand if businesses are leveraging detailed consumer data to engage in surveillance pricing, and this inquiry will illuminate the hidden practices of pricing intermediaries.”
The agency is interested in gathering information on four critical areas: the types of surveillance pricing services offered by each company, their data collection methods, relevant customer and sales data, and the influence of these practices on the prices consumers ultimately pay.