The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to implement personalized pricing strategies.
The investigation specifically targets eight companies across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies have been ordered to provide information on how their pricing practices affect privacy, competition, and consumer protection.
The FTC is examining a practice known as “surveillance pricing,” or “dynamic pricing,” where companies present different prices for the same products based on consumer characteristics or behaviors, such as location, demographics, credit history, and shopping history.
Many of the firms being investigated offer transaction, sales, and pricing services to some of the largest companies in the U.S. and worldwide. For instance, Task Software manages transactions for notable hospitality brands like McDonald’s and Starbucks, while Revionics provides pricing analytics to major retailers like Home Depot. Pros, which markets AI-driven pricing solutions, counts well-known clients such as Nestlé, HP, and United Airlines, and is a technology partner of Microsoft.
The FTC aims to clarify the “opaque market” that characterizes consumers and sets personalized prices for products and services. FTC Chair Lina 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 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 information, and the impact of these practices on consumer pricing.