The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their practices in utilizing customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The agency has issued orders to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking insights into how these pricing tactics affect privacy, competition, and consumer rights.
These companies engage in a practice referred to as “surveillance pricing,” also known as “dynamic pricing,” where they display varying prices for the same products based on individual consumer attributes such as location, demographics, credit history, and online shopping behavior.
Many of the companies involved supply transaction, sales, and pricing services to both prominent U.S. and international corporations. Task Software is recognized for its transaction management services supporting major hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization software and serves numerous global chains, including Home Depot. Pros is known for its AI-powered pricing solutions and lists clients such as Nestlé, HP, and United Airlines, while also partnering with Microsoft for technology development.
The FTC is aiming to clarify what it describes as an “opaque market” that enables the categorization of consumers and the setting of targeted prices for goods 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 particularly interested in four key areas: the types of surveillance pricing services offered by each firm, the methods of data collection, customer and sales data, and how these practices influence the final prices consumers pay.