The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their utilization of customer data, algorithms, and artificial intelligence to implement individualized pricing strategies.
Eight companies across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have been ordered by the FTC to provide insights into how these pricing practices affect privacy, competition, and consumer protection.
These companies employ tools such as artificial intelligence to implement “surveillance pricing” or “dynamic pricing,” which allows them to present varying prices for the same products based on consumer-specific characteristics and behaviors, including location, demographics, credit history, and previous shopping habits.
Many of the firms under scrutiny offer transaction, sales, and pricing solutions to some of the largest enterprises in the U.S. and worldwide. Task Software manages transactions for major hospitality brands, including McDonald’s and Starbucks. Revionics supplies retail price optimization software and analytics to global retailers like Home Depot, while Pros, which specializes in AI-driven pricing solutions, counts major corporations like Nestlé, HP, and United Airlines among its clients and partners with Microsoft in technology development.
The FTC aims to clarify the “opaque market” that categorizes consumers and implements targeted pricing for various products and services. FTC Chair Lina Khan emphasized the potential risks to consumer privacy, 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. 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 is specifically seeking information on four main aspects: the types of surveillance pricing products and services offered by each company; methods of data collection; customer and sales data; and the impact of these practices on the prices consumers ultimately pay.