The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their use of customer data, algorithms, and artificial intelligence to implement personalized pricing strategies.
Eight companies from various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—have received information requests from the FTC, inquiring about the implications of these pricing practices on privacy, competition, and consumer protection.
These companies utilize tools like artificial intelligence to engage in what is known as “surveillance pricing” or “dynamic pricing,” where different prices are presented to consumers for the same products based on factors such as location, demographics, credit history, and browsing or shopping behaviors.
Many of the firms involved are key providers of transaction, sales, and pricing services to major U.S. and international companies. For instance, Task Software handles transaction management for well-known hospitality brands, including McDonald’s and Starbucks. Revionics offers retail price optimization software and analytics to global chains like Home Depot. Pros, which provides AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines and collaborates with Microsoft as a technology partner.
The FTC aims to investigate this “opaque market,” which categorizes consumers and sets targeted prices for various products and services.
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 is seeking information on four main topics: the kinds of surveillance pricing products and services provided by each company, data collection methods, customer and sales information, and the ways in which these practices impact the final prices customers pay.