The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their utilization of customer data, algorithms, and artificial intelligence to tailor pricing strategies to individuals.
The FTC has issued requests to eight firms across various sectors — including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros — seeking insights into how such pricing methods affect privacy, competition, and consumer protection.
These companies engage in what is known as “surveillance pricing” or “dynamic pricing,” wherein different prices are presented to consumers for identical products based on factors such as location, demographics, credit history, and online shopping behavior.
Most of the companies under scrutiny provide transaction, sales, and pricing services to major corporations both in the U.S. and globally. Task Software is recognized for handling transaction management for several leading hospitality companies, including McDonald’s and Starbucks. Revionics offers retail pricing optimization software and analytics to notable global retailers like Home Depot, while Pros, known for its AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to clarify the intricacies of this “opaque market” that classifies consumers and establishes targeted pricing models.
“Firms that harvest Americans’ personal data can compromise privacy. Now, these businesses could be leveraging vast amounts of personal information to impose higher prices,” FTC Chair Lina Khan stated. “Americans have the right to understand whether their detailed consumer data is being used to implement surveillance pricing, and this inquiry will illuminate the obscure operations of pricing intermediaries.”
The agency is specifically seeking information in four primary areas: the types of surveillance pricing products and services offered by each company; methods of data collection; customer and sales data; and the impact of these practices on the pricing consumers ultimately pay.