The Federal Trade Commission (FTC) has initiated an investigation into several notable companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
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The FTC has sent inquiries to eight companies across various sectors — including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros — seeking details about how these pricing methodologies may affect privacy, competition, and consumer protection.
These companies utilize data analytics tools, known as “surveillance pricing” or “dynamic pricing,” to present varying prices for identical products based on individual consumer characteristics or behaviors, such as location, demographics, credit history, and online activity.
Many of the firms under investigation offer transaction, sales, and pricing services to some of the largest corporations both in the U.S. and internationally. Task Software, for example, manages transactions for major hospitality brands including McDonald’s and Starbucks. Revionics specializes in retail price optimization software utilized by numerous global chains, including Home Depot. Pros, which promotes itself as a provider of AI-based pricing solutions, has clients like Nestlé, HP, and United Airlines, and also collaborates with Microsoft on technology development.
The FTC aims to explore this “opaque market” that categorizes consumers and establishes targeted pricing for goods and services.
“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,” stated FTC Chair Lina Khan. “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 regulatory body is particularly interested in four main areas: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales information, and the impact of these surveillance practices on consumer pricing.