The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The inquiry targets eight firms from various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies have been asked to provide information on how their pricing practices affect privacy, competition, and consumer protection.
The practice under scrutiny, known as “surveillance pricing” or “dynamic pricing,” involves utilizing data tools such as AI to present different prices to consumers for the same products based on specific characteristics or behaviors. Factors influencing these prices may include location, demographics, credit history, and browsing or shopping history.
Notably, many of the companies implicated provide transaction, sales, and pricing services to major U.S. and global corporations. For instance, Task Software assists several hospitality giants, including McDonald’s and Starbucks, while Revionics offers retail price optimization tools to companies like Home Depot. Pros claims to deliver AI-driven pricing solutions and serves clients such as Nestlé, HP, and United Airlines, in partnership with Microsoft.
The FTC aims to unravel this “opaque market” that categorizes consumers and determines targeted pricing for products and services. FTC Chair Lina Khan remarked, “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 commission is seeking information on four primary areas: the types of surveillance pricing products and services offered by each company, data collection methods, customer and sales information, and the impact of these practices on the prices consumers ultimately pay.