The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to customize pricing for individual consumers.
The companies under scrutiny include Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC has issued orders to these firms seeking insights into how these pricing strategies affect privacy, competition, and consumer protection.
Utilizing data tools such as AI, these companies engage in a practice known as “surveillance pricing,” or “dynamic pricing,” which allows them to present varying prices for the same products based on individual consumer characteristics or behaviors. Factors influencing these prices can include location, demographics, credit history, and past shopping or browsing behavior.
Many of the firms contacted by the FTC are notable providers of transaction, sales, and pricing services to leading companies in the U.S. and globally. Task Software, for instance, is linked to major hospitality brands like McDonald’s and Starbucks, while Revionics offers retail price optimization software to global retail chains, including Home Depot. Pros, known for its AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines and partners with Microsoft for technology development.
The FTC aims to uncover more about this “opaque market” that classifies consumers and assigns targeted prices for goods 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 agency is seeking information in four primary areas: the types of surveillance pricing products and services offered by each company, data collection methods, customer and sales data, and the effects of these surveillance practices on consumer pricing.