The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies over their use of customer data, algorithms, and artificial intelligence to implement personalized pricing strategies.
The investigation targets eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies have been ordered to provide information regarding how these pricing methods affect privacy, competition, and consumer protection.
Companies are utilizing data tools such as AI in a practice known as “surveillance pricing” or “dynamic pricing,” which allows different prices to be shown to consumers for identical products based on factors like location, demographics, credit history, and online behavior.
Many of the firms contacted by the FTC are involved in providing transaction, sales, and pricing services to significant U.S. and global companies. Task Software manages transactions for major hospitality chains, including McDonald’s and Starbucks, while Revionics supplies retail price optimization tools for various global retailers, including Home Depot. Pros, a technology company known for its AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and also partners with Microsoft in technology development.
The FTC aims to clarify this “opaque market,” which enables companies to categorize consumers and set targeted prices for goods and services. FTC Chair Lina Khan remarked, “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 seeks information in four main areas: the types of surveillance pricing products and services offered by each company, data collection methods, customer and sales information, and how these practices influence the final prices that consumers pay.