The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The investigation targets eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies have been ordered to provide information about how their pricing practices affect privacy, competition, and consumer protection.
Many of these firms utilize data tools in a practice dubbed “surveillance pricing” or “dynamic pricing,” which enables them to display varying prices for the same products based on individual consumer characteristics or behaviors. Factors such as location, demographics, credit history, and browsing habits can influence these tailored prices.
Notably, Task Software supports major hospitality brands like McDonald’s and Starbucks with transaction management services. Revionics specializes in retail price optimization software for global companies, including Home Depot. Pros, which offers AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines and collaborates with Microsoft on technology development.
The FTC aims to clarify the workings of this “opaque market,” where consumers are categorized, leading to targeted pricing for goods and services.
FTC Chair Lina Khan emphasized the need for 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 details on four primary aspects: the surveillance pricing products and services offered by each company, their data collection methods, customer and sales information, and the impact of these practices on the prices consumers ultimately pay.