The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received inquiries on Tuesday from the regulatory body, which seeks to understand the implications of these pricing methods on privacy, competition, and consumer protection.
These firms utilize data tools—often referred to as “surveillance pricing” or “dynamic pricing”—to present varying prices to different consumers based on various traits such as location, demographics, credit history, and online behaviors.
Many of the firms approached by the FTC offer transaction, sales, and pricing services to significant businesses in the United States and around the world. Task Software is notable for managing transactions for leading hospitality companies like McDonald’s and Starbucks. Revionics provides retail price optimization software to major retailers, including Home Depot. Pros, which markets itself as an AI-driven pricing solutions provider, counts Nestlé, HP, and United Airlines among its clientele and collaborates with Microsoft for technology development.
The FTC aims to clarify the “opaque market” that segments consumers and assigns targeted prices for goods and services. FTC Chair Lina Khan emphasized the risks associated with companies that exploit personal data, stating, “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 input on four specific areas: the types of surveillance pricing products and services offered, methods of data collection, customer and sales information, and the impact of these practices on pricing for consumers.