The Federal Trade Commission (FTC) has initiated an inquiry into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing strategies.
Eight businesses from various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—received requests for information from the FTC on Tuesday. The agency aims to understand how these pricing techniques affect consumer privacy, market competition, and consumer protection.
These companies utilize tools like artificial intelligence in a practice referred to as “surveillance pricing” or “dynamic pricing,” which allows them to present different prices for the same products based on individual customer traits such as location, demographics, credit history, and browsing or shopping patterns.
Many of the organizations being examined by the FTC play significant roles in providing transaction, sales, and pricing services to major corporations both in the U.S. and internationally. Task Software manages transactions for notable hospitality brands including McDonald’s and Starbucks, while Revionics delivers pricing optimization and analytics software to companies like Home Depot. Pros, which specializes in AI-driven pricing solutions, boasts clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC is focused on uncovering practices within what it describes as an “opaque market,” where companies may categorize consumers and implement targeted pricing strategies. FTC Chair Lina Khan emphasized the potential risks to consumer privacy, stating, “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.” She further highlighted that Americans have a right to know if their detailed information is being utilized for surveillance pricing and that the inquiry aims to clarify these practices.
The FTC’s investigation will cover four critical areas: the types of surveillance pricing products and services offered by each firm; methods of data collection; customer and sales data; and the impact of these surveillance practices on the pricing customers ultimately pay.