The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their utilization of customer data, algorithms, and artificial intelligence to set personalized pricing.
The FTC has issued requests for information to eight firms from various sectors — including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros — to explore how these practices affect privacy, competition, and consumer protection.
Companies leverage sophisticated data tools, including AI, to implement “surveillance pricing” (also known as “dynamic pricing”), which enables them to display various prices for the same products based on customer-specific factors such as location, demographics, credit history, and past online shopping behavior.
Many of the companies under scrutiny provide vital transaction, sales, and pricing services for numerous significant businesses both in the U.S. and globally. Task Software is a transaction management firm linked with major hospitality brands like McDonald’s and Starbucks. Revionics offers retail price optimization software and analytics to global chains, including Home Depot. Pros specializes in AI-driven pricing solutions and serves clients such as Nestlé, HP, and United Airlines, and partners with Microsoft for technology development.
The FTC aims to clarify the complexities of this “opaque market,” which categorizes consumers and determines targeted pricing strategies 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 seeking details in four primary areas: the range of surveillance pricing products and services offered by each company; methods of data collection; customer and sales data; and the influence of these surveillance pricing practices on the final prices consumers pay.