The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their practices in utilizing customer data, algorithms, and artificial intelligence for personalized pricing. The inquiry affects eight companies including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, which have been ordered to provide information on how their pricing strategies impact privacy, competition, and consumer protection.
These firms employ a tactic known as “surveillance pricing” or “dynamic pricing,” which allows them to display varying prices for identical products based on consumer characteristics such as location, demographics, credit history, and online behavior.
Many of the targeted companies play significant roles in providing transaction, sales, and pricing services to major U.S. and international businesses. For example, Task Software supports well-known hospitality brands like McDonald’s and Starbucks, while Revionics develops retail pricing software for a range of global retailers, including Home Depot. Pros, known for its AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to uncover the complexities of this “opaque market” that categorizes customers and assigns them specific prices for goods and services. FTC Chair Lina Khan has expressed concerns that companies utilizing Americans’ personal data could jeopardize individuals’ privacy, potentially leading to higher prices based on detailed consumer profiles. She emphasized the need for transparency regarding whether businesses are using consumer data for surveillance pricing and underscored the FTC’s commitment to investigating this intricate system of pricing intermediaries.
The agency is seeking insights in four critical areas: the specific surveillance pricing products and services offered by each company, their data collection methods, customer and sales data, and the impact of these surveillance practices on pricing for consumers.