The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
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The FTC has issued orders to eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking information on how these pricing practices affect privacy, competition, and consumer protection.
These companies leverage data tools, such as AI, to implement a strategy referred to as “surveillance pricing” or “dynamic pricing,” which allows them to present varied prices for the same products based on consumer characteristics or behaviors. Factors influencing these prices can include a customer’s location, demographics, credit history, and online shopping habits.
Many of the companies being investigated provide pricing, transaction, or sales services to significant U.S. and global brands. Task Software, for example, manages transactions for notable hospitality chains like McDonald’s and Starbucks, while Revionics offers pricing optimization tools to retailers like Home Depot. Pros specializes in AI-driven pricing solutions and counts clients such as Nestlé, HP, and United Airlines, alongside its partnership with Microsoft.
The FTC aims to clarify the complexities of this “opaque market,” which categorizes consumers and determines targeted pricing for various products and services.
FTC Chair Lina Khan emphasized the importance of this inquiry, 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 FTC is seeking information on four main areas: the types of surveillance pricing services offered by each company; their data collection methods; customer and sales information; and how these practices affect the prices customers pay.