The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their use of customer data, algorithms, and artificial intelligence in personalized pricing strategies.
Eight companies spanning various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have received requests from the FTC for information on how these pricing practices affect privacy, competition, and consumer protection.
These companies employ a pricing strategy known as “surveillance pricing” or “dynamic pricing,” which allows them to present different prices for the same products based on individual consumer factors such as location, demographics, credit history, and online behavior.
The firms under scrutiny often provide transaction, sales, and pricing services to some of the largest entities both in the U.S. and internationally. Task Software manages transactions for prominent hospitality brands like McDonald’s and Starbucks, while Revionics offers retail price optimization services to major chains including Home Depot. Pros, a software company specializing in AI-driven pricing solutions, counts Nestlé, HP, and United Airlines as clients and partners with Microsoft for technology development.
The FTC aims to explore this “opaque market” that classifies shoppers and establishes targeted pricing for goods and services. FTC Chair Lina Khan emphasized the risks to personal 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. 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 details in four primary areas: the types of surveillance pricing products and services offered by each company, data collection methods, customer and sales information, and the influence of these practices on consumer prices.