The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies concerning their use of customer data, algorithms, and artificial intelligence in personalized pricing strategies.
The inquiry follows reports of “surveillance pricing,” a practice where companies display varying prices for the same products based on individual consumer characteristics or behaviors such as location, demographics, credit history, and online activity.
The FTC has issued orders to eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking insights into how these pricing practices affect privacy, competition, and consumer rights.
Many of the contacted firms offer transaction and pricing services to some of the largest businesses in the U.S. and worldwide. Notably, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics specializes in retail price optimization for companies such as Home Depot. Pros, a technology firm known for AI-driven pricing solutions, serves clients including Nestlé and United Airlines, and collaborates with Microsoft as a technology development partner.
FTC Chair Lina Khan expressed concerns over the risks to consumer privacy posed by companies capable of exploiting personal data for profit. She emphasized the need for transparency around the use of consumer data in pricing models.
The FTC’s inquiry aims to gather information regarding the types of surveillance pricing services available, data collection methods, customer sales information, and the overall impact of these practices on consumer pricing.