FTC Launches Probe Into ‘Surveillance Pricing’ Amid Privacy Concerns

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The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their practices related to customer data, algorithms, and artificial intelligence in determining personalized pricing.

The inquiry involves eight companies—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—who have been ordered to provide information about how their pricing tactics impact privacy, competition, and consumer protection.

These companies employ data-driven strategies, often referred to as “surveillance pricing” or “dynamic pricing,” which allow them to present different prices for the same products based on customer traits or behaviors such as location, demographics, credit history, and past online shopping activity.

Many of the firms involved support the transaction, sales, and pricing needs of prominent businesses both in the U.S. and internationally. For instance, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics delivers retail pricing solutions for notable retailers including Home Depot. Pros, known for its AI-based pricing technology, has clients like Nestlé, HP, and United Airlines and collaborates with Microsoft on technology development.

The FTC aims to clarify this “opaque market” where consumers are categorized and charged targeted prices for products and services. FTC Chair Lina Khan emphasized the privacy risks associated with the collection of personal data and the potential for companies to exploit this data to inflate prices for consumers.

The investigation will focus on four main areas: the types of surveillance pricing services offered by each company, their data collection methods, customer and sales information, and the influence of these practices on the final prices consumers pay.

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