The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their practices related to customer data, algorithms, and artificial intelligence in the context of personalized pricing strategies.
The investigation has been launched against eight companies spanning various industries, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC issued orders on Tuesday requesting detailed information to assess the implications of these pricing methods on privacy, competition, and consumer protection.
These companies utilize data tools, such as AI, in a practice known as “surveillance pricing” or “dynamic pricing,” which allows them to present differing prices for identical products based on individual customer characteristics or behaviors, including location, demographics, credit history, and online shopping activity.
Many of these firms provide transaction, sales, and pricing services to major U.S. and international corporations. For instance, Task Software is the transaction management provider for notable hospitality brands like McDonald’s and Starbucks, while Revionics specializes in retail price optimization and analytics for chains like Home Depot. Pros, which offers AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft as a technology development partner.
The FTC aims to investigate this “opaque market” where consumers are categorized and subjected to targeted pricing variations for products and services. FTC Chair Lina Khan remarked, “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 commission is focused on gathering information in four primary areas: the types of surveillance pricing products and services offered by each company; the methods of data collection; customer and sales details; and the impact of these surveillance practices on the final prices consumers pay.