The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their usage of customer data, algorithms, and artificial intelligence for personalized pricing.
On Tuesday, the FTC issued inquiries to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency seeks information regarding the implications of these pricing strategies on privacy, competition, and consumer protection.
These companies utilize data tools in a practice referred to as “surveillance pricing” or “dynamic pricing,” which allows them to display varying prices to consumers for the same products based on individual characteristics or behaviors. Factors may include a customer’s location, demographics, credit history, and browsing or shopping patterns.
Many of these firms supply transaction, sales, and pricing services to major U.S. and global businesses. Task Software is known for managing transactions for significant hospitality brands such as McDonald’s and Starbucks. Revionics specializes in retail price optimization software and analytics for companies like Home Depot, while Pros, a provider of AI-driven pricing solutions, serves clients including Nestlé, HP, and United Airlines and collaborates with Microsoft on technology development.
According to FTC Chair Lina Khan, the investigation aims to clarify the “opaque market” of targeted pricing strategies that categorize consumers and adjust prices accordingly. Khan stated, “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 FTC is focusing on four critical areas in their investigation: the types of surveillance pricing products and services offered by each company, methods of data collection, customer and sales information, and the effects of these practices on the prices consumers ultimately pay.