The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence in personalized pricing strategies.
On Tuesday, the FTC issued orders to eight firms from various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency is seeking information on how these practices impact privacy, competition, and consumer protection.
These companies utilize data tools to implement a strategy known as “surveillance pricing,” or “dynamic pricing,” which allows them to present different prices to consumers based on individual characteristics or behaviors, such as location, demographics, credit history, and online shopping habits.
Many of the firms targeted in the FTC’s inquiry offer transaction, sales, and pricing services to major companies across the U.S. and globally. For example, Task Software supports significant hospitality brands like McDonald’s and Starbucks, while Revionics provides retail pricing software and analytics to global chains such as Home Depot. Pros, a provider of AI-driven pricing solutions, serves clients including Nestlé, HP, and United Airlines, and works closely with Microsoft as a technology partner.
The FTC aims to uncover the workings of what it describes as an “opaque market” that categorizes consumers and adjusts prices accordingly.
“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,” said FTC Chair Lina Khan. “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 agency is focusing on four critical areas in its investigation: the types of surveillance pricing products and services offered by each company, methods of data collection, customer and sales information, and the effects of these surveillance practices on consumer pricing.