The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their usage of consumer data, algorithms, and artificial intelligence to create personalized pricing strategies.
The companies under scrutiny include Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. On Tuesday, these companies received requests from the FTC seeking information about how their pricing practices affect consumer privacy, competition, and protections.
Many businesses utilize advanced data tools, such as artificial intelligence, to implement “surveillance pricing,” also referred to as “dynamic pricing,” which allows them to offer varying prices for the same products based on factors such as location, demographics, credit history, and individual shopping behaviors.
The firms targeted by the FTC provide essential transaction, sales, and pricing services to major players in the U.S. and internationally. Task Software is known for its transaction management services supporting key hospitality brands like McDonald’s and Starbucks, while Revionics offers retail price optimization software to large store chains, including Home Depot. Pros, which emphasizes its AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and works as a technology development partner for Microsoft.
The FTC aims to uncover details about the so-called “opaque market” that segments consumers and sets tailored prices for products and services.
“Companies that collect extensive personal data from Americans may jeopardize individuals’ privacy. There is a possibility that these businesses are utilizing this wealth of personal information to impose higher prices,” stated FTC Chair Lina Khan. “Americans have the right to understand if enterprises are employing detailed consumer data for surveillance pricing, and the FTC’s investigation will clarify this obscure network of pricing intermediaries.”
The agency seeks information in four primary areas: the types of surveillance pricing products and services offered by each company; their data collection methods; customer and sales data; and the effect of these surveillance practices on the prices paid by consumers.