The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to create personalized pricing models.
On Tuesday, the FTC issued orders to eight firms — Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros — seeking information on the effects of these pricing strategies on privacy, competition, and consumer protection.
Companies utilize data tools, including artificial intelligence, to implement what is referred to as “surveillance pricing” or “dynamic pricing.” This pricing strategy allows them to offer different prices for the same products to different consumers based on various factors, such as location, demographics, credit history, and shopping habits.
Many of the targeted firms are known for providing transaction, sales, and pricing services to major brands in the U.S. and globally. Task Software manages transactions for several well-known hospitality businesses, including McDonald’s and Starbucks. Revionics specializes in retail price optimization software used by global chains like Home Depot. Pros, which claims to offer AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, in addition to partnering with Microsoft for technology development.
The investigation aims to clarify the “opaque market” characterized by companies that categorize shoppers and apply targeted pricing based on consumer data.
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 products and services offered, data collection methods, customer and sales data, and the impact of these practices on the prices that consumers pay.