The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their usage of customer data, algorithms, and artificial intelligence to personalize pricing strategies.
Eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, were issued information requests by the FTC on Tuesday. The agency aims to examine the implications of these pricing practices on consumer privacy, market competition, and consumer protection.
These companies utilize data-driven techniques, notably “surveillance pricing” or “dynamic pricing,” which allows them to present varying prices for identical products based on consumer attributes such as location, demographics, credit history, and online behavior.
Many of the contacted firms offer transaction, sales, and pricing solutions to some of the largest businesses both in the U.S. and internationally. Task Software supports major hospitality brands, including McDonald’s and Starbucks. Revionics supplies pricing optimization tools and analytics to global retail chains like Home Depot. Pros, which claims to specialize in AI-driven pricing solutions, counts notable clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft as a technology partner.
The FTC’s investigation aims to uncover the intricacies of this “opaque market,” which monitors customers and establishes targeted pricing for goods and services.
FTC Chair Lina Khan remarked, “Firms that harvest Americans’ personal data can jeopardize personal privacy. There is concern that companies could be leveraging this extensive personal data to impose higher prices on consumers. Americans deserve transparency regarding whether businesses are utilizing detailed consumer data for surveillance pricing; the FTC’s inquiry will provide clarity on this concealed network of pricing intermediaries.”
The FTC is specifically seeking information in four main areas: the types of surveillance pricing products and services provided by each company; their data collection methods; customer and sales data; and the impact of these surveillance practices on the prices customers ultimately pay.