The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their practices surrounding customer data, algorithms, and artificial intelligence, particularly in how these are used to customize pricing for individual consumers.
Eight companies across various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—received information requests from the FTC aimed at exploring the effects of these pricing strategies on privacy, competition, and consumer rights.
These firms utilize data tools, including artificial intelligence, in a technique known as “surveillance pricing” or “dynamic pricing,” which allows businesses to display different prices for identical products based on a customer’s characteristics and behaviors. Factors such as location, demographics, credit history, and online shopping history can all influence pricing outcomes.
Many of the firms under scrutiny by the FTC are integral in providing transaction and pricing solutions to some of the largest corporations both in the United States and internationally. For instance, Task Software facilitates transaction management for significant hospitality brands like McDonald’s and Starbucks, while Revionics offers retail pricing optimization tools used by global retailers such as Home Depot. Pros, a software company focused on AI-driven pricing solutions, counts clients like Nestlé, HP, and United Airlines among its partners and collaborates with Microsoft as a technology development ally.
The FTC aims to clarify this “opaque market” that segments 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 agency is particularly interested in four critical areas: the types of surveillance pricing products and services offered by these companies; data collection methods; customer and sales data; and the impact of these surveillance practices on the pricing customers ultimately pay.