The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to implement personalized pricing strategies.
Eight companies from various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—received requests from the agency on Tuesday, seeking insights into how these pricing practices affect privacy, competition, and consumer protection.
These companies utilize tools such as AI for a method known as “surveillance pricing,” or “dynamic pricing,” which allows them to present different prices to consumers for identical products based on factors like location, demographics, credit history, and browsing behavior.
Many of the firms that the FTC has approached offer transaction, sales, and pricing services to some of the largest businesses in the U.S. and internationally. Task Software manages transactions for major hospitality companies, including McDonald’s and Starbucks, while Revionics provides pricing optimization software for global retailers like Home Depot. Pros, a software firm boasting AI-powered pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to uncover the workings of this “opaque market,” which involves categorizing shoppers and assigning specific prices for products and services.
FTC Chair Lina Khan remarked, “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 its investigation on four main 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 the prices consumers pay.