The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to set personalized pricing.
On Tuesday, the agency issued information requests to eight companies: Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These inquiries aim to understand the implications of such pricing methods on privacy, competition, and consumer protection.
Firms utilize data-driven strategies, often referred to as “surveillance pricing” or “dynamic pricing,” to display different prices to consumers based on various factors, including location, demographics, credit history, and browsing habits.
The companies under investigation provide transaction, sales, and pricing services to major U.S. and global businesses. For instance, Task Software manages transactions for prominent hospitality brands like McDonald’s and Starbucks, while Revionics delivers retail price optimization solutions to chains such as Home Depot. Pros, which focuses on AI-driven pricing software, serves clients like Nestlé, HP, and United Airlines and partners with Microsoft for technological development.
The FTC is probing this “opaque market” that personalizes pricing for consumers. FTC Chair Lina Khan highlighted the potential risks to privacy when businesses collect personal data, stating, “Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing.” The inquiry aims to clarify the complex dynamics between these companies and their pricing practices.
The FTC is specifically seeking information in four areas: the types of surveillance pricing services offered, data collection methods, customer and sales data, and the effect of these practices on customer pricing.