The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing for consumers.
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The FTC has issued orders to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, requesting detailed information about the effects of their pricing strategies on privacy, competition, and consumer protection.
These companies utilize data tools, commonly referred to as “surveillance pricing” or “dynamic pricing,” which allows them to present varying prices for identical products based on factors such as consumers’ location, demographics, credit history, and online shopping activities.
Many of the firms targeted by the FTC provide transaction and pricing services to major U.S. and international companies. Task Software, for instance, manages transactions for significant players in the hospitality sector, including McDonald’s and Starbucks. Revionics offers price optimization software and pricing analytics to numerous global retailers, including Home Depot. Pros, which specializes in AI-powered pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and is also a technology development partner with Microsoft.
The FTC aims to investigate this “opaque market” where consumers are categorized and subjected to targeted pricing strategies.
“Companies that collect Americans’ personal data may be threatening their privacy. They could be taking advantage of this wealth of personal information to impose higher prices,” stated FTC Chair Lina Khan. “Americans deserve transparency regarding whether businesses are utilizing detailed consumer data for surveillance pricing, and the FTC’s investigation will unveil this concealed pricing landscape.”
The FTC is seeking insights in four main areas: the types of surveillance pricing products and services offered by each company, their data collection methods, relevant customer and sales information, and the impact of these practices on the prices consumers ultimately pay.