The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence in personalized pricing strategies.
Eight firms that span various sectors — Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros — received formal requests from the FTC seeking insights into how these practices affect privacy, market competition, and consumer protection.
These companies utilize data tools, including AI, in a method referred to as “surveillance pricing” (also known as “dynamic pricing”), which enables them to present varying prices for identical products based on individual consumer traits or actions, such as location, demographics, credit score, and shopping behaviors.
Many of the firms approached by the FTC offer transaction, sales, and pricing services to major U.S. and global corporations. Task Software serves as the transaction management provider for several well-known hospitality chains, including McDonald’s and Starbucks. Revionics is known for its retail price optimization software, used by numerous businesses such as Home Depot. Pros is a software entity that claims to offer AI-driven pricing solutions and has clients like Nestlé, HP, and United Airlines. Additionally, it collaborates with Microsoft for technology development.
The FTC aims to clarify the intricacies of this “opaque market” which categorizes consumers and establishes targeted prices for various products and services.
“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,” said FTC Chair Lina Khan. “Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing, and the FTC’s inquiry will shed light on this shadowy ecosystem of pricing middlemen.”
The FTC’s investigation will focus on four primary areas: the types of surveillance pricing products and services offered by each company; the methods used for data collection; information on customers and sales; and the impact of these practices on customer pricing.