The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their utilization of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The FTC has issued orders to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking information on how these practices affect consumer privacy, competition, and protection.
These companies are implementing a practice referred to as “surveillance pricing,” also known as “dynamic pricing,” where different prices for the same products are shown to consumers based on individual characteristics such as location, demographics, credit history, and online behavior.
Many of the involved firms offer transaction, sales, and pricing services to some of the largest corporations in the U.S. and worldwide. Task Software manages transactions for notable hospitality businesses like McDonald’s and Starbucks, while Revionics provides price optimization software for retail chains, including Home Depot. Pros, which markets itself as a provider of AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines and is a technology partner of Microsoft.
The FTC aims to investigate this “opaque market” that defines customer categories and establishes targeted pricing for goods and services. FTC Chair Lina Khan emphasized that companies using personal data could jeopardize individuals’ privacy, suggesting that exploitation of such information may lead to elevated prices for consumers. The inquiry seeks to illuminate this enigmatic pricing landscape.
The FTC is looking for information across four main areas: the types of surveillance pricing services offered by each company; methods of data collection; customer and sales data; and the influence of these practices on the prices consumers ultimately pay.