The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their practices related to the use of customer data, algorithms, and artificial intelligence for personalized pricing strategies. As part of this inquiry, the FTC has issued requests for information to eight firms: Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros.
This investigation centers on a method known as “surveillance pricing,” also referred to as “dynamic pricing,” where businesses change the prices of identical products based on various consumer traits or behaviors. Factors that can influence these prices include a customer’s location, demographic information, credit history, and their online browsing or shopping habits.
Many of the companies under scrutiny offer transaction, sales, and pricing solutions to major U.S. and international firms. For example, Task Software manages transactions for major hospitality brands such as McDonald’s and Starbucks, while Revionics provides pricing optimization software for retailers like Home Depot. Pros is known for its AI-driven pricing solutions, serving clients including Nestlé, HP, and United Airlines, and collaborates with Microsoft.
The FTC aims to investigate this “opaque market” that profiles consumers and adjusts pricing accordingly. 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 FTC is specifically seeking information on four main areas: the types of surveillance pricing products and services offered by each company, the methods of data collection, customer and sales information, and the impact of these surveillance practices on the final prices that customers pay.