The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their methods of utilizing customer data, algorithms, and artificial intelligence to customize pricing.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received inquiries from the FTC seeking information about how these practices affect privacy, competition, and consumer protection.
These companies are utilizing data tools, commonly referred to as “surveillance pricing” or “dynamic pricing,” to display varying prices for identical products based on individual consumer characteristics and behaviors. Factors influencing this can include location, demographics, credit history, and browsing or shopping habits.
Notably, many of these firms offer transaction, sales, and pricing services to some of the largest corporations in the U.S. and worldwide. Task Software manages transactions for numerous major hospitality brands, including McDonald’s and Starbucks. Revionics supplies retail price optimization software and pricing analytics to global chains, including Home Depot. Pros, an AI-driven pricing solutions firm, serves clients such as Nestlé, HP, and United Airlines and partners with Microsoft in technology development.
The FTC aims to investigate this “opaque market” that profiles shoppers and establishes targeted pricing for products and services.
FTC Chair Lina Khan emphasized the necessity of transparency, stating, “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 agency is seeking insights in four critical areas: the nature of surveillance pricing products and services each company provides; their data collection methods; relevant customer and sales data; and the ways in which these practices affect the prices customers ultimately pay.