The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence in personalized pricing strategies.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have received requests from the FTC for information related to the implications of these pricing tactics on privacy, competition, and consumer protection.
These companies employ a technique referred to as “surveillance pricing” or “dynamic pricing,” which involves displaying different prices for the same products based on consumer attributes such as location, demographics, credit history, and historical shopping or browsing behavior.
Many of the firms under investigation provide transaction, sales, and pricing services to major U.S. and global corporations. Task, for instance, manages transactions for notable hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization software for various international chains, including Home Depot. Pros, a provider of AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft as a technology development partner.
The FTC aims to uncover practices in this “opaque market,” which identifies shoppers and establishes targeted pricing for products and services. FTC Chair Lina Khan emphasized the risks to consumer privacy posed by companies collecting extensive personal data, highlighting the possibility that this information might be wielded to impose higher prices on individuals. She stated, “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’s investigation will focus on four main areas: the types of surveillance pricing products and services offered by each company, the methods of data collection, customer and sales information, and the impact of these pricing practices on the final costs faced by consumers.