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 strategies.
On Tuesday, the agency issued orders to eight firms including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking insights into how these pricing practices affect privacy, competition, and consumer protection.
Companies utilize data tools to implement “surveillance pricing” or “dynamic pricing,” presenting different prices to consumers for identical products based on various factors such as location, demographics, credit history, and previous shopping behavior.
Many of the companies under investigation offer transactional, sales, and pricing services to some of the largest firms in the U.S. and globally. Notably, Task Software is known for managing transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics provides pricing optimization software to retailers like Home Depot. Pros, which markets itself as a provider of AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines and partners with Microsoft for technology development.
The FTC aims to uncover the intricacies of this “opaque market” that classifies consumers and assigns targeted pricing for various products and services.
“Companies that collect extensive personal data from Americans can jeopardize individual privacy. There is a risk that these firms could exploit personal information to impose higher prices,” stated FTC Chair Lina Khan. “Consumers have the right to understand whether detailed data is being used to implement surveillance pricing, and the FTC’s investigation will illuminate this concerning area of pricing practices.”
The FTC is particularly focused on four main areas of inquiry: the types of surveillance pricing products and services provided by each company, methods of data collection, customer and sales information, and the influence of these surveillance techniques on the prices customers ultimately pay.