The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to implement personalized pricing strategies.
The FTC has issued requests for information to eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The investigation aims to analyze how these pricing practices affect consumer privacy, competition, and protection.
These companies utilize data tools to engage in what is referred to as “surveillance pricing” or “dynamic pricing,” which allows them to display different prices for the same products based on consumer characteristics such as location, demographics, credit history, and online behavior.
Many of the firms being reviewed provide transactional and pricing services to major corporations across the United States and internationally. Task Software supports several leading hospitality brands, including McDonald’s and Starbucks, while Revionics specializes in pricing analytics for retailers like Home Depot. Pros, known for its AI-driven pricing solutions, counts prominent names like Nestlé, HP, and United Airlines among its clientele and collaborates with Microsoft for technology development.
The FTC aims to clarify the implications of this “opaque market” that segments shoppers and adjusts prices accordingly. FTC Chair Lina Khan emphasized the potential risks to consumer privacy, stating, “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 seeking information in four essential areas: the types of surveillance pricing products and services provided by each company, data collection methods, customer and sales data, and the impact of these surveillance practices on pricing for consumers.