FTC Launches Major Investigation into Alleged ‘Surveillance Pricing’ Practices

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The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence in setting personalized prices.

The inquiry targets eight firms from various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The regulatory agency is seeking information about how these pricing methods affect privacy, competition, and consumer protection.

Companies are utilizing data-driven tools, referred to as “surveillance pricing” or “dynamic pricing,” which allow them to present different prices to consumers for identical products based on individual characteristics or behavior. These criteria may include factors such as geographic location, demographics, credit profiles, and online shopping history.

The FTC aims to thoroughly investigate this “opaque market” that classifies consumers and applies targeted pricing strategies for goods and services.

“Firms that exploit Americans’ personal data can jeopardize people’s privacy. Now there’s concern that these firms may be leveraging extensive personal information to charge higher prices,” stated FTC Chair Lina Khan. “Americans deserve insight into whether companies are employing detailed consumer data to implement surveillance pricing, and the FTC’s inquiry will clarify the complex pricing structures at play.”

The FTC is specifically interested in four areas: the types of surveillance pricing products and services offered, data collection methods, customer and sales data, and how these surveillance strategies affect the final prices paid by customers.

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