The Federal Trade Commission (FTC) has initiated an investigation into several notable companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing for customers.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have received information requests from the agency. The FTC aims to understand how these pricing strategies affect privacy, competition, and consumer protection.
These companies utilize advanced data tools, including AI, to implement a practice referred to as “surveillance pricing,” also known as “dynamic pricing.” This strategy allows companies to present varying prices for the same products based on individual characteristics or behaviors such as location, demographics, credit history, and online activity.
Many of the firms under scrutiny provide transaction, sales, and pricing services to prominent businesses in the United States and around the world. Task Software is recognized for managing transactions for major hospitality brands, including McDonald’s and Starbucks. Revionics focuses on retail price optimization and analytics and serves global chains like Home Depot. Pros, a company known for its AI-driven pricing solutions, has clients including Nestlé, HP, and United Airlines and partners with Microsoft.
The FTC aims to investigate the “opaque market” that utilizes consumer categorization to set tailored prices for various products and services. FTC Chair Lina Khan emphasized the potential risks to consumers’ privacy, stating that companies gathering personal data might exploit it to impose higher prices. She noted, “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 particularly interested in 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 surveillance techniques on consumer pricing.