The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence in personalized pricing strategies.
The regulatory agency issued information requests to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These inquiries aim to examine the implications of pricing practices on privacy, competition, and consumer protection.
Companies utilize data-driven methods, such as artificial intelligence, for what is often referred to as “surveillance pricing” or “dynamic pricing,” which adjusts prices displayed to consumers based on various factors, including location, demographic information, credit history, and browsing patterns.
Many of the companies under investigation supply transaction, sales, and pricing services to leading U.S. and international businesses. For example, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics provides pricing optimization tools for retailers, including Home Depot. Pros is another software provider known for its AI-based pricing solutions, with clients like Nestlé, HP, and United Airlines, and collaborates with Microsoft in technology development.
The FTC aims to clarify this “opaque market” that segments consumers and sets tailored prices for goods and services.
“Companies that collect personal data from Americans risk compromising their privacy. There is a concern that these firms may be using extensive personal information to impose higher prices,” stated FTC Chair Lina Khan. “Americans should know if businesses are employing detailed consumer data for surveillance pricing, and the FTC’s investigation will illuminate this obscure realm of pricing intermediaries.”
The agency is seeking information in four major areas: the types of surveillance pricing products and services each company provides, their data collection methods, customer and sales data, and the impact of these practices on pricing for consumers.