The Federal Trade Commission (FTC) has initiated an investigation into several leading companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing.
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The FTC has issued requests for information to eight major firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency is examining the implications of these pricing practices on privacy, competition, and consumer protection.
Companies utilize data tools, including AI, in a practice known as “surveillance pricing” or “dynamic pricing,” which presents different prices to consumers based on various attributes and behaviors such as location, demographics, credit history, and shopping history.
Many of the firms targeted by the FTC provide transaction, sales, and pricing services to prominent companies both in the U.S. and internationally. Task Software manages transactions for major hospitality brands, including McDonald’s and Starbucks, while Revionics supplies retail price optimization software to global chains like Home Depot. Pros, which focuses on AI-driven pricing solutions, lists clients such as Nestlé, HP, and United Airlines and collaborates on technology development with Microsoft.
The FTC aims to clarify this “opaque market,” where shoppers are categorized and targeted with specific pricing strategies.
“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,” stated FTC Chair Lina Khan. “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 FTC is specifically seeking information in four areas: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales information, and how these surveillance practices affect the final prices consumers pay.