The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to customize pricing.
On Tuesday, the FTC issued orders to eight companies—including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—requesting information on how such pricing practices impact privacy, competition, and consumer protections.
Companies utilize data-driven tools, known as “surveillance pricing” or “dynamic pricing,” which allows them to present different prices to consumers based on various factors such as location, demographics, credit history, and online shopping behavior.
Many firms targeted by the FTC supply transaction, sales, and pricing services to major corporations in the U.S. and worldwide. Task Software, for example, manages transactions for well-known hospitality brands like McDonald’s and Starbucks. Revionics offers retail price optimization and pricing analytics software, serving clients such as Home Depot. Pros specializes in AI-driven pricing solutions and lists Nestlé, HP, and United Airlines among its clients, while also partnering with Microsoft for technology development.
The FTC’s inquiry aims to clarify the complexities of the market that profiles shoppers and establishes targeted pricing for 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 agency is seeking information in four specific areas: the types of surveillance pricing solutions offered by each company, their data collection methods, customer and sales data, and the effects of these surveillance practices on the prices consumers ultimately pay.