The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to customize pricing for individuals.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have received information requests from the agency. The FTC aims to understand the implications of these pricing strategies on privacy, competition, and consumer rights.
These companies implement what is known as “surveillance pricing” or “dynamic pricing,” allowing them to present different prices for the same products based on various consumer attributes such as location, demographics, credit history, and shopping habits.
Many of the firms under scrutiny provide transaction, sales, and pricing services to leading enterprises both in the United States and worldwide. Task Software, for instance, is a transaction management partner for notable hospitality brands like McDonald’s and Starbucks. Revionics supplies retail price optimization and pricing analytics tools to global chains, including Home Depot. Pros, known for its AI-powered pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and also collaborates with Microsoft in technology development.
The FTC is seeking to clarify issues within this “opaque market,” which categorizes shoppers and assigns targeted prices to goods and services.
FTC Chair Lina Khan emphasized the risks of privacy violations associated with the collection of consumer data. “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,” Khan stated. She added that consumers have a right to know if their detailed data is being used for surveillance pricing, highlighting the need for increased transparency in this complex pricing environment.
The FTC’s inquiry will focus on four main areas: the specific surveillance pricing services each company offers, data collection methods, customer and sales information, and the impact of these practices on final pricing for consumers.