The Federal Trade Commission (FTC) has initiated an investigation involving several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The inquiry encompasses eight firms from various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies received requests from the FTC for information on how their pricing tactics might affect privacy, competition, and consumer protection.
These businesses utilize data tools — often referred to as “surveillance pricing” or “dynamic pricing” — which allow them to present different prices to customers based on specific attributes or behaviors. Factors can include location, demographics, credit history, and even shopping habits.
Many of the firms under scrutiny play significant roles in transaction, sales, and pricing services for major corporations both in the U.S. and internationally. For instance, Task Software supports key players in the hospitality industry like McDonald’s and Starbucks, while Revionics specializes in retail price optimization software used by global retailers such as Home Depot. Pros, a tech provider that emphasizes its AI-enabled solutions for pricing, serves clients that include Nestlé, HP, and United Airlines, and collaborates with Microsoft as a technology development partner.
The FTC aims to investigate the “opaque market” that categorizes consumers and dictates targeted pricing for various products and services. FTC Chair Lina Khan expressed concern, stating, “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 agency is seeking information regarding four primary aspects: the types of surveillance pricing products and services provided by each company, how they collect data, customer and sales data, and the impact of these practices on the final prices consumers pay.