The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to customize pricing strategies.
On Tuesday, the FTC issued inquiries to eight companies across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking information about the effects of these pricing practices on privacy, competition, and consumer protection.
These companies utilize data tools, often referred to as “surveillance pricing” or “dynamic pricing,” which allow them to display differing prices for the same products based on consumer characteristics or behaviors. Factors such as location, demographics, credit history, and online shopping behaviors may influence these prices.
Several of the companies under investigation provide transaction, sales, and pricing solutions to major U.S. and international firms. For example, Task Software supports significant hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization software and works with numerous global retailers, including Home Depot. Pros, which markets itself as an AI-driven pricing solutions provider, has clients like Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to clarify this “opaque market” that segments shoppers and establishes targeted pricing for products and services. FTC Chair Lina Khan highlighted the risk to personal privacy posed by companies that exploit consumer data, stating, “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 information in four main areas: the surveillance pricing products and services offered by each company, data collection methods, customer and sales information, and the impact of these surveillance practices on final consumer pricing.