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 across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have received requests from the FTC for information related to privacy, competition, and consumer protection in relation to these pricing practices.
These companies utilize data tools and practices referred to as “surveillance pricing” or “dynamic pricing,” allowing them to present different prices to consumers based on various factors such as location, demographics, credit history, and online behavior.
Many of the firms contacted are major players in providing transaction, sales, and pricing services to significant corporations both in the U.S. and internationally. For instance, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics offers retail pricing optimization tools to large retailers, including Home Depot. Pros, which specializes in AI-powered pricing solutions, works with brands like Nestlé, HP, and United Airlines and collaborates with Microsoft for technology development.
The FTC aims to clarify this “opaque market,” which categorizes consumers and sets targeted prices for products and services. FTC Chair Lina Khan expressed concern over the potential exploitation of personal data, 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.” The inquiry is intended to uncover the practices surrounding surveillance pricing and how they affect consumers.
The FTC is seeking information in four main areas: the types of surveillance pricing products and services offered by each company, the data collection methods used, customer and sales information, and the influence of these practices on the prices consumers ultimately pay.