The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received data requests from the FTC aimed at understanding how these practices affect consumer privacy, competition, and protection.
These companies utilize “surveillance pricing,” also known as “dynamic pricing,” which allows them to show varying prices for the same products based on individual characteristics or behaviors, such as location, demographics, credit history, and browsing history.
Many of the firms contacted by the FTC are key providers of transaction, sales, and pricing services to major U.S. and global businesses. Task Software, for instance, supports several large hospitality brands, including McDonald’s and Starbucks, while Revionics specializes in retail price optimization for chains like Home Depot. Pros, which offers AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines and collaborates with Microsoft.
The FTC aims to investigate the “opaque market” that categorizes customers and sets targeted prices for products and services.
FTC Chair Lina Khan emphasized the risks posed by these practices, 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 commission is seeking information in four primary areas: the types of surveillance pricing products each company offers, their data collection methods, customer and sales information, and the impact of these practices on the final prices customers pay.