The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to implement personalized pricing strategies.
Eight companies across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received information requests from the FTC on Tuesday. The agency is seeking to understand how these pricing practices affect privacy, competition, and consumer protection.
These companies utilize data-driven tools enabling a practice often referred to as “surveillance pricing” or “dynamic pricing,” which allows them to display different prices for the same products based on individual consumer traits or behaviors such as location, demographics, credit history, and browsing or shopping history.
Many firms contacted by the FTC provide pricing, sales, and transaction services to some of the largest corporations in the U.S. and internationally. Task Software, for instance, manages transactions for major restaurant chains such as McDonald’s and Starbucks. Revionics offers retail price optimization and analytics services to global retailers like Home Depot, while Pros, known for its AI-powered pricing solutions, serves prominent companies like Nestlé, HP, and United Airlines and partners with Microsoft on technology development.
The FTC aims to clarify this “opaque market” that classifies consumers and assigns targeted pricing for products and services.
“Companies that collect Americans’ personal data can jeopardize individual privacy. There is a risk that they could exploit this wealth of information to impose higher prices,” stated FTC Chair Lina Khan. “Consumers deserve transparency regarding whether businesses are using extensive consumer data for surveillance pricing, and the FTC’s investigation will illuminate this obscure pricing ecosystem.”
The FTC is particularly interested in four areas: the types of surveillance pricing services offered by each firm, their data collection methods, customer and sales data, and the impact of these surveillance practices on the prices customers ultimately pay.