The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to customize pricing for individuals.
The FTC has issued requests for information to eight companies across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency aims to explore how these pricing practices affect consumer privacy, competition, and protection.
These companies utilize data-driven tools, often labeled “surveillance pricing” or “dynamic pricing,” which enable them to present different prices to consumers for identical products based on factors like location, demographics, credit history, and shopping behavior.
Many firms under scrutiny by the FTC offer transaction, sales, and pricing services to leading U.S. and global businesses. For instance, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization and provides services to large chains such as Home Depot. Pros, known for its AI-enabled pricing solutions, serves clients like Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC is investigating this “opaque market” that differentiates shoppers and assigns targeted prices for goods 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 agency is seeking information in four main areas: the types of surveillance pricing products and services offered; the methods of data collection; customer and sales data; and the impact of these surveillance practices on the prices customers pay.