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.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received requests for information from the agency. The FTC is examining how these pricing practices affect privacy, competition, and consumer protection.
Companies utilize tools like AI to implement “surveillance pricing” or “dynamic pricing,” which allows them to present different prices for the same products depending on various consumer attributes, such as location, demographics, credit history, and browsing or shopping habits.
Several contacted firms provide transaction, sales, and pricing services to major corporations in the U.S. and around the world. Task Software manages transactions for hospitality giants like McDonald’s and Starbucks, while Revionics offers price optimization software to large retailers, including Home Depot. Pros, known for its AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to clarify the complexities of this “opaque market” that utilizes consumer categorization for targeted pricing.
“The exploitation of personal data can jeopardize individual privacy, and we are concerned that companies might be using extensive personal information to impose higher prices,” stated FTC Chair Lina Khan. “Americans deserve transparency regarding whether businesses are leveraging detailed consumer data for surveillance pricing, and our inquiry aims to illuminate this obscure pricing ecosystem.”
The FTC is specifically seeking information on four key aspects: the types of surveillance pricing services offered by each company; the methods of data collection; customer and sales information; and the impact of these practices on consumer pricing.