The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to implement personalized pricing strategies.
The inquiry has targeted eight firms across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC is seeking information about the implications of these pricing practices on privacy, competition, and consumer protections.
These companies utilize data-driven tools, often referred to as “surveillance pricing” or “dynamic pricing,” to present consumers with varying prices for identical products based on attributes such as location, demographics, credit history, and online behavior.
Several of the firms under investigation provide transaction and pricing services to some of the largest businesses in the United States and worldwide. Task Software manages transactions for major hospitality brands, including McDonald’s and Starbucks, while Revionics offers retail price optimization tools to large chains like Home Depot. Pros, which markets itself as a provider of AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and partners with Microsoft for technology development.
The FTC aims to unveil the complexities of this “opaque market,” where consumers are categorized and charged prices that reflect their data profiles.
FTC Chair Lina Khan emphasized the risks associated with the exploitation of personal data, stating, “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 agency is looking for information regarding the types of surveillance pricing products and services offered by these companies, their data collection methods, customer and sales data, and the impact of these practices on the prices consumers ultimately pay.