The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to set personalized pricing.
Eight companies spanning various industries, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received subpoenas from the FTC on Tuesday. The agency is seeking insights into how these pricing practices affect privacy, competition, and consumer protection.
These companies utilize data-driven methodologies known as “surveillance pricing” or “dynamic pricing,” which allows them to present different prices for the same products based on consumer characteristics and behaviors. Factors such as location, demographics, credit history, and past shopping behavior can influence these price variations.
Many of the firms under scrutiny provide transaction, sales, and pricing services to some of the largest businesses both in the United States and globally. Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization and offers its services to global chains such as Home Depot. Pros, which claims to provide AI-powered pricing solutions, serves clients including Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to uncover what it describes as an “opaque market” that profiles consumers and establishes targeted pricing strategies. FTC Chair Lina Khan stated, “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 commission is specifically looking for information in four critical areas: the types of surveillance pricing products and services offered by each company, data collection methods, customer and sales information, and the impact of these practices on the pricing consumers ultimately pay.