The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The FTC has sent orders to eight firms across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, requesting information on how these practices affect privacy, competition, and consumer protection.
These companies utilize data-driven tools, often referred to as “surveillance pricing” or “dynamic pricing,” which enables them to present different prices for the same products based on consumer characteristics such as location, demographics, credit history, and shopping behavior.
Many of the firms involved provide transaction, sales, and pricing services to prominent businesses both in the United States and globally. Task Software, for instance, manages transactions for major hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization and analytics for companies such as Home Depot, while Pros, which offers AI-based pricing solutions, counts Nestlé, HP, and United Airlines among its clientele and partners with Microsoft for technology development.
The FTC aims to clarify the complexities of this “opaque market,” where consumers are categorized and charged targeted prices. 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 FTC’s investigation will focus on four main areas: the types of surveillance pricing services offered, data collection methods, customer and sales information, and the influence of these practices on the prices consumers ultimately pay.