The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The inquiry targets eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC has requested information to assess the implications of these pricing methods on privacy, competition, and consumer protection.
These companies utilize advanced data tools to implement “surveillance pricing,” also referred to as “dynamic pricing.” This practice involves presenting different prices to consumers for identical products based on various factors such as location, demographics, credit history, and shopping behavior.
Many of the firms in question provide transaction, sales, and pricing services to notable corporations both in the U.S. and globally. Task Software supports several major hospitality brands, including McDonald’s and Starbucks. Revionics supplies retail price optimization tools and analytics to large retailers like Home Depot. Pros claims to be an AI-driven solutions provider for pricing, serving clients such as Nestlé, HP, and United Airlines, and it partners with Microsoft for technology development.
The FTC aims to illuminate this “opaque market,” which categorizes consumers and establishes targeted pricing models for products and services. FTC Chair Lina Khan emphasized the potential risks to privacy posed by companies that collect vast amounts of personal data, indicating that they might exploit this information to impose higher prices. She stated, “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 has outlined 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 impact of these surveillance practices on the prices customers ultimately pay.