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. The inquiry targets eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, with the aim of gathering information related to the implications of these pricing practices on privacy, competition, and consumer protection.
These companies utilize data-driven techniques, often referred to as “surveillance pricing” or “dynamic pricing,” to present varying prices for identical products based on individual consumer attributes such as location, demographics, credit background, and shopping behavior.
Many of the firms in question offer transaction, sales, and pricing solutions to several of the largest corporations both domestically and internationally. Task Software manages transactions for key hospitality brands, including McDonald’s and Starbucks. Revionics delivers retail price optimization and analytics services to global entities like Home Depot. Pros, which markets itself as a leading provider of AI-based pricing solutions, serves clients like Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC’s goal is to investigate the complexities of this “opaque market” that categorizes shoppers and assigns targeted pricing for various goods and services. FTC Chair Lina Khan emphasized the risks associated with companies that leverage Americans’ personal data, warning that they could be using this extensive information to impose higher prices on consumers. Khan stated, “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’s investigation will focus on four main areas: the types of surveillance pricing solutions offered, methods of data collection, customer and sales data, and the influence of these practices on final pricing for consumers.