The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for customized pricing strategies.
On Tuesday, the FTC issued orders to eight firms from various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, to gather information about how these pricing methodologies affect privacy, competition, and consumer protection.
Companies are utilizing data tools like AI through a technique referred to as “surveillance pricing” or “dynamic pricing,” where different prices are presented to consumers based on their personal characteristics or behaviors. Factors influencing pricing may include location, demographics, credit history, and online shopping habits.
Most of the companies under investigation provide transaction, sales, and pricing services to major businesses both in the U.S. and internationally. Task Software is known for its management solutions for large hospitality chains such as McDonald’s and Starbucks. Revionics specializes in retail price optimization and analytics for global brands, including Home Depot. Pros provides AI-based pricing solutions and serves notable clients such as Nestlé, HP, and United Airlines, while also partnering with Microsoft for technology development.
The FTC aims to explore this “opaque market” that categorizes consumers and assigns targeted prices for various products and services.
“Companies that collect personal data can jeopardize consumer privacy. There is a concern that firms might be taking advantage of extensive personal information to impose higher prices,” FTC Chair Lina Khan stated. “Americans have the right to understand whether businesses are utilizing their detailed data for surveillance pricing, and the FTC’s investigation will bring clarity to this obscure pricing ecosystem.”
The FTC is seeking details on four main areas: the types of surveillance pricing products and services offered by each company; the methods used to collect data; customer and sales information; and the impact of these surveillance techniques on the final prices consumers pay.