The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing.
Eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have been served with information requests related to the effects of such pricing practices on privacy, competition, and consumer safeguards.
These companies utilize advanced data tools, often referred to as “surveillance pricing” or “dynamic pricing,” to present consumers with varying prices for the same products based on individual characteristics or behaviors such as location, demographics, credit history, and online browsing or shopping activities.
Many of the firms under FTC scrutiny provide essential transaction, sales, and pricing services to leading businesses both in the United States and internationally. Task Software is known for its transaction management solutions for major hospitality chains like McDonald’s and Starbucks. Revionics offers retail price optimization software to global companies, including Home Depot. Pros specializes in AI-driven pricing solutions and serves clients such as Nestlé, HP, and United Airlines, in addition to being a technology partner of Microsoft.
The FTC aims to clarify the complexities of the “opaque market” that profiles shoppers and assigns targeted pricing strategies.
“Companies that collect Americans’ personal data can jeopardize their privacy. Some may be using this extensive information to impose higher prices,” stated FTC Chair Lina Khan. “Consumers deserve transparency regarding whether their detailed data is being used for surveillance pricing, and the FTC’s investigation will illuminate this hidden landscape of pricing intermediaries.”
The regulatory body is particularly interested in four main aspects: the various surveillance pricing products and services offered by each company, their data collection methods, customer and sales data, and the implications these surveillance tactics have on the prices consumers ultimately pay.