The Federal Trade Commission (FTC) has initiated an investigation into several leading companies regarding their use of customer data, algorithms, and artificial intelligence to create individualized pricing strategies.
On Friday, Jerome Powell is anticipated to deliver a keynote speech at Jackson Hole that could significantly influence market movements, prompting investors to pay close attention.
The FTC has issued information requests to eight firms — including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros — to examine the implications of these pricing approaches on privacy, competition, and consumer protections.
These companies utilize data tools and practices known as “surveillance pricing,” or dynamic pricing, which allow them to present varied prices for the same products based on individual consumer characteristics and behaviors, such as location, demographics, credit history, and online activity.
Many of the companies under investigation provide transaction, sales, and pricing services to major firms both in the United States and internationally. Task Software supports transaction management for several large hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization software and analytics for global retailers like Home Depot, while Pros offers AI-driven pricing solutions, counting Nestlé, HP, and United Airlines among its clients. Additionally, Pros partners with Microsoft for technology development.
The FTC aims to clarify the workings of this “opaque market” that profiles consumers to establish targeted pricing for products and services.
FTC Chair Lina Khan stated, “Firms that harvest Americans’ personal data can put people’s privacy at risk. Now firms could be exploiting this vast trove of personal information to charge people higher prices. 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 offered by each company; their data collection methods; customer and sales data; and how these surveillance practices affect the prices consumers pay.