The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their practices related to customer data, algorithms, and artificial intelligence in pricing strategies. The inquiry involves eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, which have been ordered to provide information about the implications of their pricing methods on privacy, competition, and consumer protection.
These companies utilize data tools and techniques like “surveillance pricing” or “dynamic pricing,” which allows them to display varying prices for the same products based on consumer characteristics such as location, demographics, credit history, and browsing habits.
Many of the firms under investigation are significant players in transaction and pricing services for large corporations domestically and internationally. Task Software supports major hospitality brands, including McDonald’s and Starbucks, while Revionics offers retail price optimization and analytics for global chains like Home Depot. Pros, known for its AI-driven pricing solutions, counts clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to clarify the operations of this “opaque market” where shopper categorization can lead to targeted pricing strategies for various products and services. FTC Chair Lina Khan highlighted concerns over the potential risks to consumer privacy due to extensive personal data collection, emphasizing that Americans deserve transparency on whether their detailed consumer information is being used to implement surveillance pricing. The commission’s investigation will focus on four primary areas: the types of surveillance pricing services offered, data collection methods, sales and customer information, and the influence of these practices on consumer prices.