The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The FTC has issued orders to eight companies—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—seeking information on how these pricing methods affect privacy, competition, and consumer protection.
These companies employ a method known as “surveillance pricing,” or “dynamic pricing,” which allows them to present varying prices for the same products based on customer characteristics or behaviors, such as location, demographics, credit history, and online activity.
Many of the firms being investigated provide transaction and pricing services to major U.S. and international corporations. Task Software manages transactions for well-known brands like McDonald’s and Starbucks, while Revionics offers retail price optimization solutions to global retailers, including Home Depot. Pros, which specializes in AI-driven pricing solutions, counts major companies like Nestlé, HP, and United Airlines among its clients and collaborates with Microsoft on technology development.
The FTC aims to uncover the workings of this “opaque market,” which categorizes consumers and applies targeted pricing strategies.
“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,” remarked 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 commission is focusing on four main areas of inquiry: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales information, and how these practices impact the final prices customers pay.