The Federal Trade Commission (FTC) has initiated an investigation targeting several major corporations regarding their use of customer data, algorithms, and artificial intelligence to customize pricing strategies.
The FTC issued orders to eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking details about how these pricing strategies affect privacy, competition, and consumer protection.
These firms utilize data tools, including AI, to implement a practice termed “surveillance pricing” or “dynamic pricing,” where varying prices are presented to consumers based on attributes or behavior such as location, demographics, credit history, as well as browsing or shopping history.
Many of the firms under scrutiny provide transaction, sales, and pricing services to major companies both in the U.S. and globally. Task Software is known for managing transactions for several leading hospitality brands, including McDonald’s and Starbucks. Revionics offers retail price optimization software and analytics to prominent retailers like Home Depot, while Pros, which specializes in AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to clarify this “opaque market” that identifies consumers and applies targeted pricing to products and services.
“Companies that collect personal data from Americans can jeopardize individuals’ privacy. There is a concern that these companies may be exploiting this personal information to set higher prices,” stated FTC Chair Lina Khan. “Americans have the right to know if businesses are using detailed consumer data for surveillance pricing, and the FTC’s investigation aims to illuminate this complex ecosystem of pricing intermediaries.”
The FTC is specifically seeking information on four principal aspects: the types of surveillance pricing products and services offered by each company; methods of data collection; customer and sales data; and the influence of these practices on the prices customers ultimately pay.