The Federal Trade Commission (FTC) has initiated an investigation into some prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have received inquiries from the FTC, seeking insights into how these practices impact privacy, competition, and consumer protection.
These companies utilize data-driven methods, referred to as “surveillance pricing” or “dynamic pricing,” which allows them to display different prices for the same products to various consumers based on factors such as location, demographics, credit history, and online behavior.
Many of the firms under investigation provide transaction, sales, and pricing services for major businesses across the U.S. and internationally. Task Software manages transactions for well-known hospitality chains like McDonald’s and Starbucks, while Revionics delivers retail price optimization tools to large retailers, such as Home Depot. Pros, which offers AI-powered pricing solutions, serves clients including Nestlé, HP, and United Airlines and partners with Microsoft for technology development.
The FTC aims to clarify this unclear market that sorts shoppers and establishes targeted pricing strategies.
FTC Chair Lina Khan remarked, “Companies that collect Americans’ personal data can jeopardize individuals’ privacy. It appears that these companies might be utilizing extensive personal data to impose higher prices. Americans deserve transparency on whether their detailed consumer data is being used for surveillance pricing, and the FTC’s investigation will illuminate this obscure landscape of pricing intermediaries.”
The FTC is seeking information in four primary areas: the surveilling pricing products and services provided by each company, methods of data collection, customer and sales data, and the overall influence of these surveillance methods on consumer pricing.