The Federal Trade Commission (FTC) has initiated an investigation involving several prominent companies regarding their utilization of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
On Tuesday, the FTC issued information requests to eight companies—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency aims to understand how these pricing practices affect privacy, competition, and consumer protection.
These companies employ techniques known as “surveillance pricing” or “dynamic pricing,” which allows them to present different prices for the same products based on various consumer characteristics, including location, demographics, credit history, and shopping behavior.
Among the firms involved, Task Software manages transactions for major hospitality brands such as McDonald’s and Starbucks, while Revionics provides pricing optimization tools for retailers like Home Depot. Pros, known for its AI-driven pricing solutions, has clients that include Nestlé, HP, and United Airlines, and also collaborates with Microsoft in technology development.
The FTC’s investigation is aimed at clarifying the “opaque market” of targeted pricing that categorizes consumers and adjusts prices accordingly.
FTC Chair Lina Khan commented, “Companies that gather Americans’ personal data pose a risk to individual privacy. It is possible that these businesses are using extensive personal information to set higher prices. Americans have a right to understand if their data is being used for surveillance pricing, and the FTC’s inquiry will provide insight into this murky environment of pricing intermediaries.”
The FTC is seeking information concerning four primary aspects: the types of surveillance pricing products and services offered, data collection methods, customer and sales information, and the impact of these practices on consumer prices.