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.
Eight companies from various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—were issued orders by the regulatory body on Tuesday. The FTC is seeking insights on how these pricing practices impact privacy, competition, and consumer protection.
The investigation focuses on a pricing strategy known as “surveillance pricing” or “dynamic pricing,” where companies display varying prices for identical products based on individual consumer traits or behaviors, such as geographic location, demographics, credit history, and online shopping habits.
Many of the firms under scrutiny provide transaction, sales, and pricing services to leading corporations in the United States and abroad. Task Software manages transactions for major hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization and analytics for several global chains, including Home Depot. Pros, known for its AI-powered pricing solutions, has clients like Nestlé, HP, and United Airlines, and collaborates with Microsoft in technology development.
The FTC aims to investigate this “opaque market” that categorizes consumers and establishes targeted pricing for goods and services.
“Companies that collect extensive personal data from Americans may jeopardize their privacy. It is possible that these companies are using this wealth of information to charge consumers higher prices,” stated FTC Chair Lina Khan. “Americans have the right to understand if businesses are leveraging detailed consumer data to implement surveillance pricing, and the FTC’s investigation will illuminate this obscure network of pricing intermediaries.”
The FTC seeks information on four main aspects: the types of surveillance pricing services and products offered by each firm, data collection methods, customer and sales information, and how these surveillance tactics affect the prices consumers ultimately pay.