The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their utilization of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight companies have been issued information requests by the regulatory body, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC is examining how these practices may impact privacy, competition, and consumer protection.
These companies are known for employing techniques like “surveillance pricing,” also referred to as “dynamic pricing,” which allows them to display different prices to consumers based on various factors such as location, demographics, credit history, and shopping habits.
Many of the targeted firms provide critical transaction, sales, and pricing services to some of the largest corporations both in the U.S. and internationally. For example, Task Software manages transactions for major hospitality chains like McDonald’s and Starbucks, while Revionics offers pricing optimization tools to global retailers, including Home Depot. Pros is recognized for its AI-driven pricing solutions and has notable clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to clarify the complexities of this “opaque market” that profiles consumers and assigns targeted pricing.
FTC Chair Lina Khan emphasized that the use of personal data could jeopardize consumer privacy and potentially allow businesses to charge higher prices. She stated, “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 focusing its investigation on four main aspects: the surveillance pricing products and services provided by each company, their data collection methods, the information they possess about customers and sales, and how these surveillance practices affect the prices paid by customers.