The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to create personalized pricing strategies.
The inquiry includes eight firms from various sectors: Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies received requests from the FTC to provide details about how these pricing practices affect privacy, competition, and consumer protection.
These companies utilize data tools and a practice known as “surveillance pricing,” also referred to as “dynamic pricing,” which allows them to present different prices for the same products depending on consumer characteristics such as location, demographics, credit history, and shopping habits.
Many of the targeted firms offer transaction, sales, and pricing services to some of the largest companies both in the U.S. and internationally. Task is known for its transaction management solutions for major hospitality businesses, including McDonald’s and Starbucks. Revionics specializes in retail price optimization software and analytics for global retailers like Home Depot. Pros markets itself as a provider of AI-driven pricing solutions, serving clients such as Nestlé, HP, and United Airlines, and also partners with Microsoft on technology development.
The FTC aims to clarify the “opaque market” that enables the categorization of shoppers and the establishment of targeted pricing for products and services.
“Companies that gather Americans’ personal data may jeopardize people’s privacy. They could be using this extensive collection of personal information to impose higher prices,” stated FTC Chair Lina Khan. “Americans have a right to understand whether businesses are employing detailed consumer data for surveillance pricing, and the FTC’s investigation will reveal this hidden ecosystem of pricing intermediaries.”
The FTC is seeking information in four primary areas: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales data, and the ways in which these surveillance practices affect the prices consumers ultimately pay.