The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their use of customer data, algorithms, and artificial intelligence in customizing pricing strategies.
Eight companies from various sectors — Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros — received requests from the FTC seeking details about the effects of their pricing practices on consumer privacy, competition, and protection.
These companies utilize data-driven tools, including AI, to implement what is referred to as “surveillance pricing” or “dynamic pricing.” This strategy allows businesses to present different prices to consumers for identical products based on individual characteristics or behaviors, such as location, demographics, credit history, and past shopping behavior.
Among those under scrutiny, Task Software manages transactions for prominent hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization software for major retail chains, including Home Depot. Pros, which claims to offer AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines and collaborates with Microsoft for technological development.
The FTC aims to clarify the complexities of this “opaque market” that categorizes consumers and assigns tailored prices for products and services.
“Companies that collect Americans’ personal data may compromise privacy. These firms might be exploiting this extensive assemblage of data to impose higher prices,” stated FTC Chair Lina Khan. “Americans deserve transparency regarding whether businesses are leveraging detailed consumer information for surveillance pricing, and the FTC’s investigation will illuminate this clandestine pricing system.”
The FTC is concentrating its inquiry on four primary areas: the types of surveillance pricing solutions offered by each company, the methods of data collection, customer and sales information, and the influence of these surveillance practices on the final prices consumers pay.