The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their utilization of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight companies from various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—received inquiries from the agency on Tuesday as part of the investigation. The focus is to understand how these practices potentially affect privacy, competition, and consumer protection.
Companies are employing techniques known as “surveillance pricing” or “dynamic pricing,” which involves adjusting prices for the same products based on individual consumer characteristics or behaviors, such as location, demographics, credit history, and online activity.
Many of the companies under scrutiny provide transaction, sales, and pricing services to major corporations both in the United States and internationally. Task Software is known for managing transactions for significant hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization and analytics for numerous global chains, including Home Depot. Additionally, Pros, which offers AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft for technology development.
The FTC aims to investigate the complexities of the market that enables businesses to categorize consumers and implement targeted pricing strategies.
FTC Chair Lina Khan emphasized the potential risks associated with personal data exploitation, stating, “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.” She highlighted the importance of transparency for consumers regarding whether businesses are utilizing detailed data for surveillance pricing practices, and expressed that the inquiry intends to clarify this obscured area of pricing intermediaries.
The FTC’s investigation will focus on four main areas: the types of surveillance pricing products and services offered by each company, how they collect data, customer and sales information, and the ways in which these practices affect the prices that consumers ultimately pay.