The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to adjust pricing for consumers individually.
On Tuesday, the regulatory agency issued orders to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking information related to how these pricing strategies affect privacy, competition, and consumer protection.
Many businesses employ data tools such as AI in a practice referred to as “surveillance pricing” or “dynamic pricing,” which allows them to display varying prices for the same products based on the customer’s characteristics or behaviors. These factors can include location, demographics, credit history, and previous browsing or shopping habits.
The companies targeted by the FTC often provide transaction, sales, and pricing services to some of the largest firms both in the United States and internationally. For instance, Task is known for its transaction management services for major hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization software and analytics for companies such as Home Depot. Pros is recognized for its AI-driven pricing solutions and counts Nestlé, HP, and United Airlines among its clients, while also partnering with Microsoft for technology development.
The FTC aims to clarify the complexities of a market that categorizes consumers and establishes targeted pricing for products and services.
FTC Chair Lina Khan stated, “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 specifically seeking details in four main areas: 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 pay.