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 across various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—were issued orders by the agency seeking information about the implications of these pricing methods on privacy, competition, and consumer protection.
Known as “surveillance pricing” or “dynamic pricing,” this practice allows companies to display different prices for identical products based on various customer attributes, including location, demographics, credit history, and browsing or shopping history.
Many of the firms under scrutiny by the FTC offer transaction, sales, and pricing services to major U.S. and international corporations. Task Software is a transaction management provider for notable hospitality brands such as McDonald’s and Starbucks. Revionics specializes in retail price optimization and provides pricing analytics to leading global retailers like Home Depot. Pros, recognized for its AI-driven pricing solutions, has clients that include Nestlé, HP, and United Airlines, and it also collaborates with Microsoft on technology development.
The FTC aims to clarify the complexities of this “opaque market,” where shoppers are categorized, and targeted pricing is established for various products and services.
“Companies that collect personal data from Americans may jeopardize individual privacy. They might exploit this extensive reservoir of information to set higher prices for consumers,” stated FTC Chair Lina Khan. “Consumers deserve transparency regarding whether businesses utilize detailed data to implement surveillance pricing, and this inquiry aims to illuminate the hidden dynamics of pricing intermediaries.”
The FTC is focusing on four primary areas: the specific surveillance pricing products and services being offered by each company; the methods of data collection; information about customers and sales; and the impact of these surveillance practices on the prices consumers actually pay.