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 strategies.
On Tuesday, the FTC issued information requests to eight firms from various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The aim is to understand how these practices may affect privacy, competition, and consumer protection.
Companies are using data-driven methods, including artificial intelligence, in a practice referred to as “surveillance pricing” or “dynamic pricing.” This approach allows them to display varying prices to consumers for the same product, depending on factors such as location, demographics, credit history, and online behavior.
Many of the firms under investigation offer transaction, sales, and pricing services to some of the largest companies in the U.S. and internationally. For instance, Task Software manages transactions for major hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization and analytics for chains like Home Depot. Pros, which promotes 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 sorts consumers and sets targeted prices for products and services. “Companies that collect Americans’ personal data may be jeopardizing their privacy. These firms could be leveraging vast amounts of personal information to set higher prices,” stated FTC Chair Lina Khan. “Americans have the right to know if businesses are utilizing detailed consumer data for surveillance pricing, and the FTC’s inquiry will illuminate this obscure network of pricing intermediaries.”
The agency is looking for insights in four primary areas: the types of surveillance pricing solutions offered by each company; data collection methods; customer and sales information; and the impact of these pricing practices on consumer costs.