The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their use of customer data, algorithms, and artificial intelligence to customize pricing for individual consumers.
The agency has issued information requests to eight companies across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC aims to understand how these pricing practices impact privacy, competition, and consumer protection.
These companies utilize data tools, often referred to as “surveillance pricing” or “dynamic pricing,” which allows them to display varying prices for the same products based on individual consumer characteristics and behaviors. Factors influencing this pricing can include geographical location, demographic information, credit history, and online shopping habits.
Among those targeted by the FTC, some firms provide transaction and pricing services to numerous major players in the U.S. and international markets. For instance, Task Software manages transactions for well-known hospitality brands such as McDonald’s and Starbucks, while Revionics specializes in retail price optimization and analytics for companies like Home Depot. Pros, which offers AI-driven pricing solutions, has an impressive client list including Nestlé, HP, and United Airlines, and collaborates with Microsoft for technology development.
The FTC’s investigation aims to clarify the complexities of this sector, which it views as an “opaque market” where consumers may be categorized and charged targeted prices for products and services.
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 seeking information in four specific areas: the types of surveillance pricing products and services offered, data collection methods, customer and sales information, and the impact of these surveillance practices on consumer pricing.