The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their use of customer data, algorithms, and artificial intelligence to create personalized pricing strategies.
Eight companies across various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—received inquiries from the FTC seeking details about how these pricing strategies affect privacy, competition, and consumer protection.
These companies employ a practice referred to as “surveillance pricing” or “dynamic pricing,” utilizing data tools, including AI, to present different prices to consumers for identical products based on specific attributes or behaviors. These factors can encompass location, demographics, credit history, and online shopping habits.
Many of the firms targeted by the FTC offer transaction, sales, and pricing services to some of the largest corporations in the U.S. and around the globe. Task Software manages transactions for key hospitality businesses, including McDonald’s and Starbucks, while Revionics provides retail price optimization tools to major retailers like Home Depot. Pros specializes in AI-driven pricing solutions and serves high-profile clients such as Nestlé, HP, and United Airlines, and is a development partner for Microsoft.
The FTC aims to clarify the intricacies of this “opaque market,” which categorizes consumers and assigns tailored prices for various products and services.
“Companies that gather extensive personal data from Americans risk compromising individuals’ privacy. There is concern that these companies may exploit this vast information repository to impose higher prices on consumers,” stated FTC Chair Lina Khan. She emphasized the need for transparency regarding whether businesses are leveraging detailed consumer data for surveillance pricing and asserted that the FTC’s investigation will bring clarity to this complex ecosystem of pricing intermediaries.
The agency is seeking information on four primary aspects related to surveillance pricing: the types of products and services each company offers, their data collection methods, customer and sales data, and the effect of these practices on the prices paid by consumers.