The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing.
Eight companies from various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received inquiries from the FTC on Tuesday. The agency seeks information on how these pricing practices impact privacy, competition, and consumer protection.
Companies use data tools like AI for a practice known as “surveillance pricing” or “dynamic pricing,” displaying different prices to consumers for the same products based on characteristics like location, demographics, credit history, and browsing history.
The companies contacted by the FTC provide transaction, sales, and pricing services to some of the largest U.S. and global firms. Task manages transactions for hospitality giants such as McDonald’s and Starbucks. Revionics offers retail price optimization and analytics to chains like Home Depot. Pros, a software company specializing in AI-powered pricing solutions, lists Nestlé, HP, and United Airlines as clients and partners with Microsoft.
The FTC aims to understand this “opaque market” that categorizes shoppers and sets targeted prices for products and services.
“Companies 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,” said FTC Chair Lina Khan in a statement. “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 seeks information in four key areas: the types of surveillance pricing products and services offered, data collection practices, customer and sales information, and how these practices influence the prices consumers ultimately pay.