The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight companies from various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received information requests from the FTC on Tuesday. The agency is examining how these practices may affect privacy, competition, and consumer protection.
These firms employ a method referred to as “surveillance pricing” or “dynamic pricing,” which allows them to offer different prices for the same products based on customer characteristics and behaviors, such as location, demographics, credit history, and online shopping habits.
Many of the companies under scrutiny provide transaction, sales, and pricing solutions to major U.S. and global businesses. Task Software manages transactions for large hospitality brands, including McDonald’s and Starbucks, while Revionics specializes in retail price optimization for chains like Home Depot. Pros, known for its AI-driven pricing solutions, counts major companies like Nestlé, HP, and United Airlines among its clients and also collaborates with Microsoft for technology development.
The FTC aims to clarify the complexities of this “opaque market,” which categorizes consumers and sets 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 FTC is specifically seeking information on four areas: the types of surveillance pricing products and services each company provides, data collection methods, customer and sales data, and the impact of these practices on the final prices customers pay.