The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing.
On Tuesday, the FTC issued orders to eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking information on how these practices affect privacy, competition, and consumer protections.
These firms utilize tools, such as AI, to implement what is known as “surveillance pricing” or “dynamic pricing,” which allows them to display varying prices for the same products based on customer characteristics or behaviors, including factors like location, demographics, credit history, and shopping habits.
Many of the entities under scrutiny provide transaction, sales, and pricing services to some of the largest companies both in the U.S. and worldwide. Task Software is known for managing transactions for notable hospitality brands like McDonald’s and Starbucks, while Revionics offers retail price optimization software to global chains, including Home Depot. Pros, which promotes AI-powered pricing solutions, serves clients such as Nestlé and HP and partners with Microsoft for technology development.
The FTC aims to clarify the complexities of this “opaque market,” where consumers are categorized and subjected to targeted pricing. 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 focusing on four key areas in its investigation: the types of surveillance pricing products and services offered by each company, methods of data collection, customer and sales data, and the influence of these practices on the prices customers ultimately pay.