The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their utilization 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, all of which received requests for information from the FTC on how these pricing strategies affect privacy, competition, and consumer protection.
These companies engage in a practice referred to as “surveillance pricing” or “dynamic pricing,” where different prices are displayed to consumers for the same products based on various factors such as location, demographics, credit history, and online shopping behavior.
Many of the firms contacted provide essential transaction, sales, and pricing services to significant companies both in the U.S. and internationally. For instance, Task Software serves major hospitality businesses like McDonald’s and Starbucks, while Revionics offers pricing optimization tools to retailers such as Home Depot. Pros, which emphasizes its AI-driven pricing solutions, has notable clients including Nestlé, HP, and United Airlines, and is also partnered with Microsoft for technology development.
The FTC aims to investigate the so-called “opaque market” that categorizes shoppers and sets targeted pricing 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 regulator is seeking insights in four primary areas: the types of surveillance pricing products and services offered by each company, methods of data collection, customer and sales data, and the effects of these practices on consumer pricing.