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 for consumers.
Eight companies spanning various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received inquiries from the FTC on Tuesday. The agency is seeking information on how these pricing strategies affect privacy, competition, and consumer protection.
Many of these firms utilize sophisticated data tools, such as AI, to implement a pricing strategy known as “surveillance pricing,” or “dynamic pricing.” This approach allows companies to present different prices for identical products based on various consumer characteristics, including location, demographics, credit history, and browsing or shopping habits.
Among the contacted companies, Task Software plays a critical role in transaction management for major hospitality brands like McDonald’s and Starbucks. Revionics offers retail price optimization software to global chains, including Home Depot, while Pros, which specializes in AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines. Pros also collaborates with Microsoft on technology development.
The FTC aims to clarify the operations within this “opaque market,” which categorizes consumers and determines targeted pricing for goods 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’s inquiry will focus on four primary areas: the types of surveillance pricing products and services offered by each company, their data collection methods, sales and customer information, and the influence of these surveillance practices on pricing for consumers.