The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to implement individualized pricing strategies.
Eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have received inquiries from the FTC aimed at understanding how these pricing practices affect privacy, competition, and consumer protection.
Companies leverage data tools, such as AI, to engage in what is referred to as “surveillance pricing” or “dynamic pricing,” which allows them to present different prices to consumers based on factors such as location, demographics, credit history, and shopping patterns.
Many of the firms approached by the FTC provide transaction, sales, and pricing services to major U.S. and global businesses. For instance, Task Software manages transactions for notable hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization and pricing analytics for international retailers including Home Depot. Furthermore, Pros is known for offering AI-powered pricing solutions and serves clients such as Nestlé, HP, and United Airlines, in partnership with Microsoft.
The FTC aims to clarify the complexities of this “opaque market,” which sorts consumers and establishes targeted prices for various products and services.
FTC Chair Lina Khan emphasized the concerns surrounding the protection of consumer privacy, stating, “Companies that gather personal data may risk individuals’ privacy. There is a possibility that these companies are using extensive personal information to impose higher prices. Americans have the right to understand if their detailed consumer data is being used for surveillance pricing, and this inquiry will illuminate the hidden mechanisms of pricing intermediaries.”
The FTC’s investigation will focus on four main areas: the types of surveillance pricing products and services offered by each firm, their data collection methods, customer and sales information, and the impact of these surveillance practices on the prices consumers ultimately pay.