The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received information requests from the FTC on Tuesday. The inquiry is focused on the effects of these pricing strategies on consumer privacy, competition, and protection.
These companies utilize data tools, such as AI, to implement a practice known as “surveillance pricing” or “dynamic pricing,” which allows them to present different prices for the same products based on varying consumer traits or behaviors. This can involve factors like location, demographic information, credit history, and browsing or shopping history.
Many of the targeted companies offer transaction, sales, and pricing services to some of the largest corporations in the United States and worldwide. Task Software supports major hospitality brands, including McDonald’s and Starbucks, while Revionics supplies retail price optimization and analytics to brands like Home Depot. Pros, which promotes its AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines and collaborates with Microsoft in technology development.
The FTC aims to investigate what it describes as an “opaque market” that profiles consumers and establishes targeted pricing for various 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 critical areas: the types of surveillance pricing solutions offered by each company, their data collection methods, customer and sales data, and the influence of these practices on the final prices consumers pay.