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 investigation targets eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These firms were ordered to provide information on how these pricing practices affect privacy, competition, and consumer protection.
The practice in question, often referred to as “surveillance pricing” or “dynamic pricing,” allows companies to present different prices to consumers based on a variety of factors, including location, demographics, credit history, and browsing or shopping habits.
Many of the targeted companies offer transaction, sales, and pricing services to leading firms both in the U.S. and globally. Task Software is known for its transaction management solutions for major hospitality brands, such as McDonald’s and Starbucks. Revionics delivers retail price optimization software to various global retailers, including Home Depot. Pros, which specializes in AI-powered pricing solutions, counts Nestlé, HP, and United Airlines among its clients and collaborates with Microsoft for technology development.
The FTC aims to uncover the nuances of this “opaque market” that categorizes consumers and sets tailored prices for goods and services. FTC Chair Lina Khan highlighted concerns over personal data exploitation, 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.” She emphasized the need for transparency regarding the use of detailed consumer data in surveillance pricing.
The FTC is seeking information in four main areas: the types of surveillance pricing products and services offered, data collection methods, customer and sales information, and the impact of these practices on consumer pricing.