The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence in pricing strategies.
Eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received information requests from the FTC on Tuesday. The agency seeks to understand how these pricing practices affect privacy, competition, and consumer protection.
The companies in question utilize data-driven methods, notably “surveillance pricing” or “dynamic pricing,” which enables them to present different prices for the same products based on individual characteristics or behaviors. Factors influencing pricing may include a customer’s location, demographics, credit history, and browsing or purchasing history.
Many of the contacted firms support the pricing and transaction systems of some of the largest enterprises in the U.S. and globally. Task Software manages transactions for major hospitality companies such as McDonald’s and Starbucks, while Revionics is known for its retail price optimization tools, serving chains like Home Depot. Pros, which markets itself as an AI-driven pricing solution provider, has clients including Nestlé, HP, and United Airlines and partners with Microsoft on technology development.
The FTC aims to unravel the complexities within this “opaque market,” which categorizes consumers and sets specific prices for products and services.
“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,” stated FTC Chair Lina Khan. “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 focusing on four primary areas of inquiry: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales information, and the influence of these practices on the prices consumers ultimately pay.