The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing strategies.
On Tuesday, the FTC issued information requests to eight companies across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency aims to assess how these practices affect privacy, competition, and consumer protection.
These companies utilize data-driven techniques, often referred to as “surveillance pricing” or “dynamic pricing,” which allows them to display different prices for identical products based on consumer characteristics such as location, demographics, credit history, and shopping behavior.
Many of the firms contacted by the FTC are significant players in providing transaction and pricing services to both U.S. and global corporations. Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics offers price optimization software to retailers including Home Depot. Pros, which provides AI-based pricing solutions, counts clients such as Nestlé, HP, and United Airlines and partners with Microsoft for technology development.
The FTC is seeking to clarify the “opaque market” surrounding targeted pricing strategies that categorize consumers and set distinct prices for goods and services.
“Companies that collect Americans’ personal data can jeopardize privacy. There’s a concern that they may exploit this extensive information to charge higher prices,” stated FTC Chair Lina Khan. “Americans need transparency on whether businesses are leveraging detailed consumer data for surveillance pricing, and our inquiry aims to illuminate this complex ecosystem of pricing intermediaries.”
The FTC’s investigation will concentrate on four main areas: the types of surveillance pricing products and services offered, methods of data collection, customer and sales data, and the impact of these practices on consumer pricing.