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 FTC issued orders to eight firms from various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—requesting information about the implications of these pricing methods on privacy, competition, and consumer rights.
These companies utilize data-driven techniques, often referred to as “surveillance pricing” or “dynamic pricing,” which allow them to present different prices for the same products based on individual consumer traits or behaviors. Factors such as location, demographics, credit history, and online browsing or shopping activities influence these pricing variations.
Many firms approached by the FTC offer transactional, sales, and pricing solutions to major corporations both in the United States and internationally. Task Software manages transactions for several key hospitality brands, including McDonald’s and Starbucks, while Revionics supplies retail price optimization tools to large retailers like Home Depot. Pros, a software company offering AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to investigate the “opaque market” that targets consumers and assigns tailored prices for various products and services. “Companies that collect Americans’ personal data can jeopardize people’s privacy. They might also be exploiting this extensive data to charge individuals higher prices,” stated FTC Chair Lina Khan. “Consumers have the right to understand whether businesses are using detailed consumer information to implement surveillance pricing, and the FTC’s investigation will illuminate this hidden network of pricing intermediaries.”
The commission’s inquiry will focus on four main aspects: the types of surveillance pricing products and services offered, the data collection methods employed, the customer and sales information gathered, and the impact of these surveillance practices on the prices consumers ultimately pay.