The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their practices of using customer data, algorithms, and artificial intelligence for personalized pricing.
The agency has directed inquiries to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. This investigation aims to gather information about how these pricing strategies affect privacy, competition, and consumer protection.
These companies utilize data-driven tools, referred to as “surveillance pricing” or “dynamic pricing,” which allow them to offer varying prices to consumers for identical products based on specific characteristics or behaviors such as location, demographics, credit history, and past shopping activities.
Many of the targeted firms play significant roles in providing transaction, sales, and pricing services to major companies in the United States and around the world. Task Software, for example, is responsible for transaction management for notable hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization and analytics for global chains, including Home Depot. Additionally, Pros, which claims to deliver AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines and partners with Microsoft on technology development.
The FTC aims to clarify the practices in this complex market, where consumers are often grouped for targeted pricing. 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 FTC’s investigation will focus on four main areas: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales information, and how these pricing practices affect the final prices customers pay.