The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight companies spanning various industries—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—received orders from the FTC requesting information about how these pricing practices impact privacy, competition, and consumer protection.
Companies utilize data-driven tools, often referred to as “surveillance pricing” or “dynamic pricing,” to present different prices to consumers for identical products based on various factors including location, demographics, credit history, and online behavior.
Many of the firms contacted by the FTC are key providers of transaction, sales, and pricing services to some of the largest businesses in the United States and worldwide. Task Software manages transactions for major hospitality chains like McDonald’s and Starbucks, while Revionics offers price optimization and analytics for global retailers such as Home Depot. Pros, an AI-focused software company, serves clients including Nestlé, HP, and United Airlines and collaborates with Microsoft on technology development.
The FTC aims to investigate this “opaque market,” which classifies shoppers and assigns them targeted prices for various products and services.
“Firms that harvest Americans’ personal data can pose risks to individuals’ privacy. They could be using this extensive personal information to charge consumers higher prices,” stated FTC Chair Lina Khan. “Americans deserve clarity on whether businesses are employing detailed consumer data for surveillance pricing, and this inquiry will illuminate the obscure world of pricing intermediaries.”
The FTC is seeking information on four main areas: the types of surveillance pricing products and services each company provides, the methods of data collection, customer and sales information, and how these surveillance practices affect consumer pricing.