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.
The investigation targets eight firms across various industries, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC has issued orders for information to assess how these pricing techniques affect privacy, competition, and consumer protection.
These companies utilize data tools, including artificial intelligence, to implement a practice referred to as “surveillance pricing” or “dynamic pricing.” This practice allows them to present different prices to consumers for identical products based on factors such as location, demographics, credit history, and browsing or shopping patterns.
Many of the firms under scrutiny provide transaction, sales, and pricing services to some of the largest businesses in the U.S. and globally. For instance, Task Software manages transactions for major hospitality chains like McDonald’s and Starbucks, while Revionics offers pricing analytics and optimization solutions to retailers including Home Depot. Pros, which markets itself as a provider of AI-driven pricing solutions, serves well-known clients such as Nestlé, HP, and United Airlines and has a technology partnership with Microsoft.
The FTC aims to investigate what it describes as an “opaque market” that identifies customers and establishes targeted pricing for products and services.
“Companies that collect personal data from Americans may endanger their privacy. Now, these firms might be taking advantage of extensive personal information to impose higher prices,” stated FTC Chair Lina Khan. “Americans need to understand if businesses are utilizing detailed consumer data to implement surveillance pricing, and this inquiry will provide insight into this unclear pricing system.”
The FTC is seeking information on four main areas: the types of surveillance pricing products and services offered by the companies, data collection methods, customer and sales information, and the impact of these surveillance practices on the prices consumers ultimately pay.