The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence in personalizing pricing strategies.
Eight companies from various sectors—including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—received demands for information from the regulatory body. The FTC is particularly interested in understanding the implications of these pricing practices on consumer privacy, competition, and protection.
These companies utilize advanced data tools, including artificial intelligence, to implement a practice known as “surveillance pricing,” or “dynamic pricing,” where consumers are shown different prices for the same products based on various attributes, such as location, demographics, credit history, and online behavior.
Many of the firms involved provide transaction, sales, and pricing services to some of the largest businesses in the United States and globally. Task Software, for instance, manages transactions for major hospitality chains like McDonald’s and Starbucks, while Revionics supplies retail price optimization tools to numerous global retailers, including Home Depot. Pros, which specializes in AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and is also a technology development partner of Microsoft.
The FTC aims to explore this “opaque market” that segments consumers and sets targeted prices. “Companies that collect personal data from Americans risk compromising their privacy. They may also be taking advantage of detailed consumer information to impose higher prices,” noted FTC Chair Lina Khan. “Americans deserve insight into whether businesses are employing detailed consumer data for surveillance pricing, and this inquiry will illuminate the complex landscape of pricing intermediaries.”
The FTC is seeking information on four main aspects: the specific surveillance pricing products and services provided by each company, data collection methods, customer and sales data, and the influence of these surveillance practices on end prices for consumers.