The Federal Trade Commission (FTC) has initiated an inquiry into several prominent companies regarding their methods of utilizing customer data, algorithms, and artificial intelligence to customize pricing strategies.
The investigation has targeted eight firms across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The regulatory body is seeking insights into how these pricing practices affect privacy, competition, and consumer protections.
These companies employ data-driven tools, often referred to as “surveillance pricing” or “dynamic pricing,” which allow them to present distinct prices to different consumers based on various factors such as location, demographics, credit history, and past shopping behavior.
Many of the firms under scrutiny provide transaction, sales, and pricing services to some of the largest corporations in both the United States and worldwide. Task Software, for instance, handles transaction management for notable hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization services for global retailers, including Home Depot. Pros markets itself as an AI-driven pricing solutions provider, servicing clients such as Nestlé, HP, and United Airlines, and partners with Microsoft for tech development.
The FTC aims to illuminate this “opaque market,” which categorizes consumers and establishes targeted pricing for various products and services.
FTC Chair Lina Khan emphasized the risks posed by companies that leverage Americans’ personal data, stating, “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 commission is particularly focused on four main areas of inquiry: the types of surveillance pricing products offered by each company, data collection methods, customer and sales information, and the influence of these surveillance practices on the pricing consumers ultimately face.