The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The inquiry targets eight firms from different sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC issued orders to these companies on Tuesday, seeking insights into the implications of such pricing practices for privacy, competition, and consumer protection.
These businesses utilize data tools, including AI, to implement a strategy referred to as “surveillance pricing” or “dynamic pricing.” This approach enables companies to present varied prices for the same products to different consumers based on attributes such as location, demographics, credit history, and browsing or shopping patterns.
Many of the firms under scrutiny offer transaction, sales, and pricing services to major corporations in the United States and internationally. Task manages transactions for notable hospitality brands like McDonald’s and Starbucks, while Revionics offers retail price optimization software to various global chains, including Home Depot. 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 the workings of this “opaque market” that segments consumers and establishes targeted prices for products and services.
“Companies that collect personal data from Americans can jeopardize individuals’ privacy. There is a possibility that firms are utilizing this extensive array of personal information to impose higher prices,” stated FTC Chair Lina Khan. “Americans deserve transparency regarding whether businesses are employing detailed consumer data for surveillance pricing, and the FTC’s inquiry will provide insight into this concealed network of pricing intermediaries.”
The FTC is seeking information on four main topics: the types of surveillance pricing products and services offered by each company, methods of data collection, customer and sales information, and the effects of these surveillance strategies on the prices consumers ultimately pay.