The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their practices related to customer data, algorithms, and artificial intelligence used for personalized pricing strategies.
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The FTC has issued requests for information from eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency is examining how these pricing strategies affect privacy, competition, and consumer protection.
These businesses utilize data-driven techniques, known as “surveillance pricing” or “dynamic pricing,” to present different prices for the same products based on specific consumer traits or behaviors. Factors influencing pricing may include location, demographics, credit history, and consumer shopping patterns.
Many of the contacted firms offer transaction, sales, and pricing services to major companies both in the U.S. and globally. Task Software, for example, manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics provides retail pricing optimization software to global chains including Home Depot. Pros, which specializes in AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to clarify the practices surrounding this “opaque market,” where consumers are profiled and faced with targeted pricing for various products and services.
FTC Chair Lina Khan stated, “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. 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 agency is seeking information on four main aspects: the types of surveillance pricing services each company offers; their data collection methods; customer and sales data; and the overall impact of these practices on consumer pricing.