The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
On Tuesday, the FTC issued inquiries to eight companies—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency seeks information on how these pricing practices affect privacy, competition, and consumer protection.
These firms utilize methods such as “surveillance pricing” or “dynamic pricing,” which allows them to display varying prices for the same products tailored to individual consumers based on factors like location, demographics, credit history, and online shopping habits.
Many of the companies involved in the FTC’s investigation provide payment, sales, and pricing services to major U.S. and global businesses. Task Software processes transactions for notable hospitality chains like McDonald’s and Starbucks, while Revionics offers pricing optimization tools to retailers such as Home Depot. Additionally, Pros, known for its AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines and collaborates with Microsoft for technology development.
The FTC aims to delve into the complexities of this “opaque market,” which classifies consumers and adjusts prices accordingly. FTC Chair Lina Khan emphasized the potential risks to consumer privacy, stating that companies might exploit extensive personal data to impose higher charges. “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,” Khan said in a statement.
The investigation will focus on four main areas: the types of surveillance pricing services offered by each company, their data collection methods, customer and sales data, and the impact of these practices on the prices ultimately paid by consumers.