The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The FTC issued orders to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking information on how these pricing practices affect privacy, competition, and consumer protection.
These companies utilize data-driven techniques, often referred to as “surveillance pricing” or “dynamic pricing,” to display varying prices for identical products based on user characteristics or behaviors. Factors influencing these price variations can include geographical location, demographic information, credit history, and online shopping behaviors.
Many of the firms under scrutiny provide transaction, sales, and pricing services to major U.S. and international corporations. Notably, Task Software facilitates transaction management for prominent hospitality brands such as McDonald’s and Starbucks, while Revionics offers retail price optimization software to global chains like Home Depot. Pros, which markets itself as a provider of AI-driven pricing solutions, has notable clients including Nestlé, HP, and United Airlines and is also a technology partner with Microsoft.
The FTC aims to clarify this “opaque market” where consumer categorization results in targeted pricing strategies. FTC Chair Lina Khan emphasized the potential risks to privacy and the possibility that companies may be exploiting extensive personal data to impose higher prices on consumers. She stated, “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 provided by each company, data collection methods, customer and sales data, and the impact of these practices on the prices consumers ultimately pay.