The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data and algorithms for personalized pricing strategies.
The agency sent information requests to eight firms: Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC is examining how this pricing approach affects privacy, competition, and consumer protection.
Companies utilize methods known as “surveillance pricing” or “dynamic pricing,” which involve displaying different prices to consumers based on their individual characteristics and behaviors. These factors can include a customer’s location, demographic information, credit history, and online shopping behavior.
Many of the identified companies offer transaction and pricing services to some of the largest firms both in the U.S. and globally. For example, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics provides pricing tools to prominent retailers such as Home Depot. Pros, which specializes in AI-driven pricing solutions, counts Nestlé, HP, and United Airlines among its notable clients and collaborates with Microsoft on technology development.
The FTC aims to investigate the “opaque market” where consumer categorization is used to set targeted prices for various products and services. FTC Chair Lina Khan emphasized the potential risks to consumer privacy due to the collection of personal data, suggesting companies might exploit such information to impose higher prices on certain consumers. The inquiry seeks to uncover the extent of surveillance pricing practices and their implications for customers.
The FTC is focusing on four main areas: the types of surveillance pricing services offered, data collection methods, customer and sales information, and the impact of these practices on final prices that consumers pay.