The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to set individualized pricing.
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Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received information requests from the FTC on Tuesday. The regulatory agency is focusing on how these pricing practices affect privacy, competition, and consumer protection.
These firms utilize advanced data tools and engage in a pricing strategy known as “surveillance pricing” or “dynamic pricing,” which allows them to display varying prices for the same products based on individual consumer characteristics or behaviors. Factors influencing these prices can include a consumer’s location, demographics, credit history, and shopping habits.
Notably, many of the targeted companies offer transaction, sales, and pricing services to leading businesses in the U.S. and worldwide. For example, Task Software supports transaction management for major hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization and provides analysis services for global chains, including Home Depot. Pros is recognized for its AI-powered pricing solutions and lists Nestlé, HP, and United Airlines among its clients, as well as partnering with Microsoft for technology development.
The FTC aims to investigate this “opaque market” which categorizes shoppers and assigns targeted pricing based on extensive data usage.
FTC Chair Lina Khan stated, “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 inquiry will focus on four critical areas: the types of surveillance pricing products and services offered by each company, methods of data collection, customer and sales information, and how these practices impact the prices consumers ultimately pay.