The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their practices of using customer data, algorithms, and artificial intelligence to set personalized pricing.
The inquiry includes eight firms from various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—who have been summoned by the FTC for information concerning the effects of these pricing strategies on privacy, competition, and consumer protection.
Companies utilize advanced data tools, including AI, in a practice referred to as “surveillance pricing” or “dynamic pricing,” which allows them to present different prices for identical products based on consumer attributes such as location, demographics, credit history, and online shopping behavior.
Many of the firms involved in the investigation provide pricing, sales, and transaction services to some of the largest corporations both in the U.S. and worldwide. Notably, Task is the transaction management company for several major hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization and supplies its pricing analytics to numerous global chains, including Home Depot. Pros, which claims to offer AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines and collaborates with Microsoft in technology development.
The FTC aims to investigate the “opaque market” that segments shoppers and establishes targeted pricing for products and services.
FTC Chair Lina Khan stated, “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 focusing on four main areas of concern: the types of surveillance pricing products and services provided by each company, data collection methods, customer and sales data, and how these pricing strategies affect what customers ultimately pay.