The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight firms spanning various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have received information requests from the FTC. The agency aims to understand how these pricing practices affect privacy, competition, and consumer protection.
Companies utilize advanced data tools, such as AI, to implement a method known as “surveillance pricing” or “dynamic pricing,” which allows them to offer different prices for the same products based on individual consumer attributes, including location, demographics, credit history, and previous shopping behavior.
Many of the firms targeted by the FTC are key players in providing transaction, sales, and pricing services to major U.S. and international corporations. For example, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics offers retail price optimization software to global chains such as Home Depot. Pros, which markets itself as an AI-driven pricing solutions provider, serves clients including Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC seeks to investigate what it describes as an “opaque market,” which categorizes consumers and implements targeted pricing 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 FTC’s inquiry will focus on four main areas: the types of surveillance pricing services and products offered by each company, the methods used for data collection, customer and sales data, and the influence of these practices on the pricing consumers ultimately pay.