The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their utilization of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The investigation targets eight major firms—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—requesting insights into how these pricing methods affect privacy, competition, and consumer protection.
Many companies utilize data analytics tools, such as AI, to implement a pattern known as “surveillance pricing,” also referred to as “dynamic pricing,” which allows different prices for the same products to be shown to consumers based on various factors such as demographics, location, credit history, and shopping behavior.
These firms provide crucial transaction, sales, and pricing services to numerous large corporations both in the United States and internationally. For instance, Task Software facilitates transaction management for well-known hospitality giants including McDonald’s and Starbucks. Revionics offers retail price optimization and pricing analytics to many global retailers, including Home Depot. Pros, which specializes in AI-driven pricing solutions, counts Nestlé, HP, and United Airlines among its clients and collaborates with Microsoft in tech development.
The FTC aims to clarify this “opaque market,” where consumer categorization might lead to targeted pricing for products and services.
FTC Chair Lina Khan emphasized the potential risks, stating, “Companies that collect personal data may jeopardize individuals’ privacy, possibly taking advantage of this extensive personal information to impose higher prices. Americans need to be informed about whether their detailed consumer data is being used for surveillance pricing, and this inquiry will unveil the murky world of pricing intermediaries.”
The FTC is focusing on four main aspects: the types of surveillance pricing products offered by these companies, the methods of data collection, customer and sales information, and the influence of these practices on the prices consumers ultimately pay.