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. The agency has reached out to eight firms across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, demanding details on how these practices impact privacy, competition, and consumer protection.
These companies engage in what is referred to as “surveillance pricing” or “dynamic pricing,” allowing them to offer different prices for identical products based on individual consumer traits such as location, demographics, credit history, and online behavior.
Many of the firms contacted provide transaction, sales, and pricing solutions to numerous major U.S. and global companies. For instance, Task Software manages transactions for well-known hospitality brands like McDonald’s and Starbucks. Revionics offers price optimization software to retailers, including Home Depot, while Pros markets itself as an AI-focused pricing solution provider, serving clients like Nestlé, HP, and United Airlines, and collaborating with Microsoft on technology development.
The FTC aims to clarify the workings of this “opaque market” that groups consumers and applies variable pricing. FTC Chair Lina Khan highlighted concerns about how personal data could be misused, 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 insights into four main areas: the specific surveillance pricing services each company provides, data collection methods, customer and sales information, and the influence of these surveillance tactics on consumer pricing.