The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their use of customer data, algorithms, and artificial intelligence to customize pricing for individuals.
Eight companies across various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—received requests from the FTC for information on how these pricing strategies may affect privacy, competition, and consumer protection.
These companies utilize data analytics tools, including AI, in a practice termed “surveillance pricing” or “dynamic pricing,” which alters prices for the same products based on customer characteristics and behaviors such as location, demographics, credit history, and shopping activity.
Many of the firms contacted provide transaction, sales, and pricing services to major corporations both in the U.S. and internationally. Task is involved with transaction management for prominent hospitality brands like McDonald’s and Starbucks. Revionics delivers retail price optimization software to global chains including Home Depot. Pros markets itself as an AI solutions provider for pricing and has clients like Nestlé, HP, and United Airlines, along with a partnership with Microsoft for technology development.
The FTC aims to clarify the workings of this “opaque market” that categorizes consumers for targeted pricing strategies. FTC Chair Lina Khan emphasized the potential privacy risks associated with the collection of personal data, stating, “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 on four main aspects: the types of surveillance pricing products each company offers, their data collection methods, customer sales data, and the impact of these practices on consumer pricing.