The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to create personalized pricing strategies.
Eight companies from various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—were served with orders by the agency on Tuesday. The FTC is seeking insights on how these pricing tactics affect privacy, competition, and consumer protections.
These firms utilize data tools, including artificial intelligence, to implement a strategy known as “surveillance pricing,” also referred to as “dynamic pricing.” This method allows companies to present different prices for identical products based on factors such as location, demographics, credit history, and online shopping behaviors.
Many of the contacted firms offer transaction and pricing services to some of the largest corporations in the United States and internationally. Task Software provides transaction management for major hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization and analytics for global chains, including Home Depot. Pros, known for its AI-driven pricing solutions, counts Nestlé, HP, and United Airlines among its clientele and is a technology development collaborator with Microsoft.
The FTC aims to clarify the dynamics of this “opaque market,” which categorizes consumers and adjusts prices accordingly.
“Companies that collect Americans’ personal data could jeopardize individuals’ privacy. These firms may even be taking advantage of extensive personal information to impose higher prices,” stated FTC Chair Lina Khan. “Consumers deserve transparency regarding whether their detailed data is being used for surveillance pricing, and this inquiry will provide insight into the obscure framework of pricing intermediaries.”
The FTC is particularly interested in four areas: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales information, and how these surveillance practices affect the prices customers pay.