The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their utilization of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received inquiries from the agency aimed at understanding the implications of these pricing practices on privacy, competition, and consumer protection.
Companies are employing a method known as “surveillance pricing” or “dynamic pricing,” leveraging data tools, particularly AI, to present varying prices for the same product based on consumer characteristics or behaviors, including location, demographics, credit history, and shopping habits.
Many of the businesses targeted by the FTC offer transaction, sales, and pricing services to major corporations in the U.S. and around the world. Task Software manages transactions for notable hospitality brands like McDonald’s and Starbucks, while Revionics specializes in retail price optimization software for global chains such as Home Depot. Pros, which markets itself as an AI-driven pricing solution provider, has clients including Nestlé, HP, and United Airlines, and partners with Microsoft for technology development.
The FTC aims to clarify the practices in this “opaque market” where shoppers may be categorized to determine targeted pricing for products and services.
“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 inquiry 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 the impact of these pricing practices on the final costs consumers face.