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.
The inquiry has focused on eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies have been issued requests for information aimed at understanding how their pricing practices relate to privacy, competition, and consumer protection.
Companies are increasingly using data-driven methods, often termed “surveillance pricing” or “dynamic pricing,” to provide varied prices for the same products based on specific consumer attributes and behaviors. These attributes can range from location and demographics to credit history and online shopping habits.
Notably, the firms under investigation play significant roles in transaction, sales, and pricing services for major corporations in the U.S. and internationally. For example, Task Software supports several large hospitality businesses, including McDonald’s and Starbucks. Revionics specializes in retail price optimization and pricing analytics, servicing global chains like Home Depot. Similarly, Pros, which offers AI-driven pricing solutions, boasts a client list that includes Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to uncover more about the perceived “opaque market” that enables companies to categorize shoppers and establish targeted pricing for various products and services.
FTC Chair Lina Khan commented on the issue, stating, “Companies that collect Americans’ personal data can jeopardize their privacy. There is a concern that these firms may be capitalizing on the extensive personal information accessible to them to impose higher prices.” She emphasized the importance of transparency regarding businesses’ use of consumer data in surveillance pricing and noted that the FTC’s investigation will reveal more about this intricate pricing environment shaped by intermediaries.
The FTC’s investigation will focus on four main areas: the types of surveillance pricing products and services offered by each company, data collection methods, customer and sales information, and the effects of these pricing practices on the final prices consumers pay.