The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their utilization of customer data, algorithms, and artificial intelligence to customize pricing for individual consumers.
Eight companies—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—have received requests from the FTC for information concerning the implications of these pricing strategies on privacy, competition, and consumer protection.
These firms are engaged in what is referred to as “surveillance pricing” or “dynamic pricing,” which allows them to present varying prices for the same products based on consumer characteristics and behaviors, including factors like location, demographics, credit histories, and online activity.
Many of the contacted companies offer transaction, sales, and pricing services to major U.S. and international entities. Task Software manages transactions for notable hospitality firms such as McDonald’s and Starbucks, while Revionics specializes in retail price optimization software for large chains, including Home Depot. Additionally, Pros, which promotes AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft.
The FTC aims to investigate this “opaque market” that categorizes consumers and establishes targeted pricing strategies for various products and services.
“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,” said 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 seeking information in four specific areas: the types of surveillance pricing products and services offered by each company; the methods of data collection; customer and sales data; and the impact of these surveillance practices on consumer pricing.