The Federal Trade Commission (FTC) has initiated an investigation into several major firms regarding their use of customer data, algorithms, and artificial intelligence to customize pricing for individual consumers.
The inquiry has emerged in the wake of McDonald’s first lawsuit linked to the Quarter Pounder E. coli outbreak. Eight companies across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have received formal requests from the FTC for information about the implications of their pricing strategies on privacy, competition, and consumer protection.
These firms utilize data-driven methods, often referred to as “surveillance pricing” or “dynamic pricing,” which enable them to display varying prices for the same products based on consumer attributes such as location, demographics, credit history, and online behavior.
Many of the companies approached by the FTC offer critical transaction, sales, and pricing services to leading brands both nationally and internationally. For instance, Task Software manages transactions for major hospitality chains, including McDonald’s and Starbucks. Revionics delivers retail pricing optimization tools to global retailers like Home Depot, while Pros, which markets AI-enhanced pricing solutions, serves notable clients such as Nestlé, HP, and United Airlines. Pros is also aligned with Microsoft as a technology development partner.
The FTC aims to investigate this “opaque market,” which categorizes consumers and sets targeted prices for goods and services. FTC Chair Lina Khan remarked that companies leveraging Americans’ personal data may endanger privacy and might be manipulating this information to impose higher prices. Khan emphasized the necessity for Americans to understand whether detailed consumer data is being utilized for surveillance pricing, and the investigation aims to clarify this intricate network of pricing intermediaries.
The FTC is seeking insights in four main areas: the specific surveillance pricing products and services offered by each company, their data collection methods, sales and customer information, and the impact of these practices on the final prices paid by consumers.