The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence in setting individualized pricing. Eight firms from various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have received inquiries from the FTC. The agency seeks information on how these practices impact privacy, competition, and consumer protection.
These companies engage in what is termed “surveillance pricing” or “dynamic pricing,” where different prices are presented to consumers based on specific characteristics or behaviors, such as location, demographics, credit history, and online shopping habits.
Many of the firms involved offer transaction, sales, and pricing services to prominent businesses both in the United States and internationally. For instance, Task Software manages transactions for major brands like McDonald’s and Starbucks, while Revionics provides price optimization tools to retailers like Home Depot. Pros, known for its AI-driven pricing solutions, counts companies like Nestlé, HP, and United Airlines among its clients and collaborates with Microsoft on technology development.
The FTC aims to clarify the complexities surrounding this market, which categorizes consumers and sets targeted prices for various products and services. FTC Chair Lina Khan emphasized the risks associated with companies harvesting personal data, stating that consumers deserve transparency regarding the use of their information in surveillance pricing practices. The inquiry is intended to illuminate the hidden mechanisms at play in pricing strategies utilized by these businesses.
The agency is particularly interested in four areas: the types of surveillance pricing products and services offered by each company, methods of data collection, customer and sales information, and the impact of these practices on final prices paid by consumers.