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.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have received requests for information from the FTC as of Tuesday. The agency aims to assess how these pricing practices affect privacy, competition, and consumer protection.
These companies utilize data-driven techniques, often referred to as “surveillance pricing” or “dynamic pricing,” to present different prices to consumers based on various factors such as location, demographics, credit history, and previous shopping behavior.
Many of the firms targeted by the FTC are integral to the operations of large corporations both in the United States and internationally. For example, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics supplies retail price optimization tools to chains like Home Depot. Pros, known for its AI-driven pricing solutions, serves notable clients including Nestlé, HP, and United Airlines, and partners with Microsoft on technology development.
The FTC seeks to uncover details about this “opaque market” where consumer categorization and targeted pricing practices occur. 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 specifically pursuing information regarding the types of surveillance pricing products and services offered by each company, their data collection methods, relevant customer and sales data, and the influence of these practices on consumer pricing.