The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies. Companies such as Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros have received inquiries from the FTC aimed at understanding the implications of these pricing practices on privacy, competition, and consumer protection.
These companies utilize data-driven techniques, often referred to as “surveillance pricing” or “dynamic pricing,” which allows them to present varied prices to consumers based on specific characteristics and behaviors, including location, demographics, credit history, and prior shopping activities.
Many of the firms targeted by the FTC provide transaction, sales, and pricing services to significant businesses both in the U.S. and globally. For instance, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks. Revionics offers retail price optimization tools and analytics to several large retailers, including Home Depot. Additionally, Pros, a company specializing in AI-driven pricing solutions, counts Nestlé, HP, and United Airlines as clients and collaborates with Microsoft on technology development.
The FTC aims to investigate the murky pricing landscape that categorizes consumers and determines targeted pricing for products and services. FTC Chair Lina Khan commented, “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 primary areas: the types of surveillance pricing products and services offered by each company, methods of data collection, customer and sales data, and the effects of these surveillance practices on the prices consumers pay.