The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their utilization of customer data, algorithms, and artificial intelligence to personalize pricing strategies.
The agency issued inquiries to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking insights into the implications of these pricing methods on privacy, competition, and consumer protection.
Companies leverage tools such as AI to implement a practice known as “surveillance pricing” or “dynamic pricing,” which allows them to present different prices for the same products based on individual consumer characteristics and behaviors, such as location, demographics, credit history, and browsing or shopping patterns.
Many of the firms contacted by the FTC supply transaction, sales, and pricing services to some of the largest companies both in the U.S. and globally. Task Software supports major hospitality brands like McDonald’s and Starbucks, while Revionics offers retail price optimization software to international chains, including Home Depot. Pros, a company that specializes in AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines and collaborates with Microsoft on technology development.
The FTC aims to explore the intricacies of this “opaque market” where consumers are categorized and targeted with specific pricing strategies.
“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,” stated FTC Chair Lina Khan. “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 investigation will focus on four main areas: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales information, and how these practices affect the prices charged to consumers.