The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their practices related to customer data, algorithms, and artificial intelligence in personalized pricing strategies.
On Tuesday, the FTC issued orders to eight firms — Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The regulatory body seeks to understand how these pricing tactics affect privacy, competition, and consumer protection.
Companies utilize tools like AI to implement a strategy known as “surveillance pricing,” or “dynamic pricing,” where prices for identical products vary based on individual consumer characteristics such as location, demographics, credit history, and browsing history.
Many of the contacted firms provide transaction, sales, and pricing services to major corporations in the U.S. and worldwide. Task Software supports numerous hospitality businesses, including McDonald’s and Starbucks. Revionics is known for offering retail price optimization and analytics to major chains, including Home Depot. Pros, which specializes in AI-driven pricing solutions, lists Nestlé, HP, and United Airlines as clients and collaborates with Microsoft.
The FTC aims to investigate this complex market, which sorts shoppers and adjusts prices accordingly. FTC Chair Lina Khan highlighted concerns about how companies may exploit personal data to impose higher prices, asserting that Americans have a right to understand whether their data is being used for such surveillance pricing practices.
The agency is seeking information in four main areas: the types of surveillance pricing products each company provides, methods of data collection, customer and sales data, and the influence of these practices on consumer pricing.