The Federal Trade Commission (FTC) has initiated an investigation into several major companies concerning their use of customer data, algorithms, and artificial intelligence for personalized pricing.
On Tuesday, the regulatory agency sent information requests to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC aims to investigate how these pricing practices affect privacy, competition, and consumer protection.
Companies employ techniques known as “surveillance pricing” or “dynamic pricing,” which adjust prices for the same products based on consumer characteristics or behaviors, such as location, demographics, credit history, and shopping habits.
Among the contacted firms, many offer transaction, sales, and pricing services to prominent domestic and international businesses. Task Software, for instance, manages transactions for major hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization software for global chains, including Home Depot. Pros, promoting itself as an AI pricing solutions provider, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft.
The FTC is seeking to clarify this “opaque market” that categorizes shoppers and sets targeted prices for various products and services. FTC Chair Lina Khan remarked, “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 FTC’s inquiry will focus on four main areas: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales information, and the impact of these practices on the prices consumers ultimately pay.