The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their utilization of customer data, algorithms, and artificial intelligence to customize pricing strategies.
A total of eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, were served orders by the FTC seeking details on how such pricing methods may affect privacy, competition, and consumer protection.
These companies use data tools, particularly AI, to implement practices known as “surveillance pricing” or “dynamic pricing,” which enables them to present varying prices for identical products based on individual consumer attributes. Factors influencing these price variations can include a customer’s location, demographics, credit history, and online shopping behavior.
Many of these queried companies offer transaction and sales services to major U.S. and global corporations. Task Software manages transactions for significant hospitality brands, including McDonald’s and Starbucks, while Revionics specializes in retail price optimization software, serving brands such as Home Depot. Pros, a firm offering AI-driven pricing solutions, counts Nestlé, HP, and United Airlines among its clients and collaborates with Microsoft on technology development.
The FTC aims to clarify this complex market that classifies consumers and applies targeted pricing for various products 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 FTC is seeking information in four main areas: the types of surveillance pricing services offered by each company; their data collection methods; customer and sales data; and the impact of these surveillance practices on final consumer pricing.