The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their use of customer data, algorithms, and artificial intelligence to customize pricing for individuals.
Eight companies spanning various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received inquiries from the FTC, seeking information on how these pricing strategies affect privacy, competition, and consumer protection.
These companies utilize data tools, often referred to as “surveillance pricing” or “dynamic pricing,” which allows them to display different prices to customers based on characteristics such as location, demographics, credit history, and shopping behavior.
Notably, many of the contacted companies supply transaction, sales, and pricing services to leading firms both in the United States and internationally. Task operates as the transaction management firm for major hospitality brands, such as McDonald’s and Starbucks. Revionics specializes in retail price optimization software for global chains, including Home Depot. Pros, which markets itself as an AI-driven pricing solutions provider, counts notable clients like Nestlé, HP, and United Airlines, and collaborates with Microsoft for technology development.
The FTC aims to address the complexities of this “opaque market” that categorizes consumers and sets target prices for goods 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 commission is specifically looking for information in four primary areas: the types of surveillance pricing products and services provided by each company, their data collection methods, customer and sales data, and how these pricing practices affect the costs that customers ultimately pay.