The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to customize pricing strategies.
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The FTC has issued orders to eight companies across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency is seeking information about the implications of these pricing practices on privacy, competition, and consumer protection.
These firms are known to employ data tools, including AI, in a practice referred to as “surveillance pricing” or “dynamic pricing.” This approach allows companies to present different prices for the same products based on consumer-specific characteristics such as location, demographics, credit history, and online browsing or shopping behaviors.
Several of the companies investigated provide vital transaction, sales, and pricing services to major corporations both in the U.S. and internationally. Task Software manages transactions for significant hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization and analytics for global chains like Home Depot. Pros markets itself as a provider of AI-driven pricing solutions, with notable clients such as Nestlé, HP, and United Airlines, and is also a technology development partner for Microsoft.
The FTC aims to clarify this “opaque market,” which categorizes shoppers and sets targeted prices for goods 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 FTC is specifically seeking information in four areas: the types of surveillance pricing products and services offered by each company, the methods of data collection, customer and sales information, and how these practices influence the prices customers ultimately pay.