The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing strategies.
The regulatory agency reached out to eight firms across various industries, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, requesting information on how these practices affect privacy, competition, and consumer protection.
These companies utilize data-driven techniques, often referred to as “surveillance pricing” or “dynamic pricing,” which allow them to present different prices for the same products based on individual consumer traits such as location, demographics, credit history, and online shopping behavior.
Many of the firms contacted by the FTC offer transaction, sales, and pricing services to some of the largest corporations in the United States and worldwide. Task Software manages transactions for prominent hospitality brands like McDonald’s and Starbucks. Revionics specializes in price optimization and provides analytics for retailers, including Home Depot. Pros, which promotes itself as a provider of AI-enhanced pricing solutions, has notable clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology developments.
The FTC aims to clarify the “opaque market” that enables the categorization of shoppers and the establishment of targeted prices for goods and services.
“Companies that exploit Americans’ personal data risk jeopardizing their privacy. There is concern that these entities could be taking advantage of extensive personal information to set higher prices,” stated FTC Chair Lina Khan. “Americans have the right to understand if businesses utilize detailed consumer data for surveillance pricing, and this inquiry will illuminate the obscure network of pricing intermediaries.”
The FTC emphasized it seeks information regarding four primary aspects: the specific surveillance pricing products and services each company provides; their data collection practices; customer and sales data; and the impact of these surveillance methods on the prices consumers ultimately pay.