The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing strategies.
The inquiry targets eight firms across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC is seeking details about how these pricing practices affect privacy, competition, and consumer protection.
These companies utilize data-driven tools, such as AI, to implement a strategy known as “surveillance pricing” or “dynamic pricing.” This approach allows them to present different prices for the same products based on individual consumer characteristics, including location, demographics, credit history, and shopping behavior.
Many of the investigated companies offer transaction, sales, and pricing services to some of the largest businesses in the United States and worldwide. Task Software, for example, handles transaction management for major hospitality brands like McDonald’s and Starbucks. Revionics provides retail price optimization software to global retailers, including Home Depot, while Pros, which markets itself as an AI-powered pricing solution provider, counts Nestlé, HP, and United Airlines among its clients and collaborates with Microsoft on technology development.
The FTC aims to clarify this “opaque market” that allows companies to categorize consumers and assign targeted prices 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,” 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 focusing its inquiry on four main areas: the types of surveillance pricing products and services offered by each company; methods of data collection; customer and sales data; and the impact of these surveillance practices on the prices paid by consumers.