The Federal Trade Commission (FTC) has commenced an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing for individual consumers.
Eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, were issued information requests by the FTC. The agency is examining how these pricing strategies impact privacy, competition, and consumer protection.
These companies utilize data tools and a practice referred to as “surveillance pricing,” also known as “dynamic pricing,” to display varying prices for the same products based on consumer attributes and behaviors. Factors influencing this pricing can include a shopper’s location, demographics, credit history, and online activity.
Many of the companies involved in the investigation provide pricing, sales, and transaction services to some of the largest organizations in the United States and around the world. Task Software manages transactions for major hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization software for chains like Home Depot. Pros, known for its AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to clarify the “opaque market” that identifies consumers and sets targeted prices for products and services.
“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,” stated FTC Chair Lina Khan. “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 FTC is seeking information in four main areas: the types of surveillance pricing products and services offered by each company; methods of data collection; customer and sales information; and the effects of these surveillance practices on the prices consumers pay.