The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence aimed at personalized pricing strategies.
Eleven firms across various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—were issued data requests from the agency on Tuesday. This inquiry seeks to assess the effects of such pricing tactics on privacy, competition, and consumer protection.
These companies utilize data-driven methodologies, often referred to as “surveillance pricing” or “dynamic pricing,” which involve displaying different prices to consumers depending on various factors such as their location, demographics, credit history, and their browsing or shopping behavior.
Many of the firms under FTC scrutiny offer transaction, sales, and pricing solutions to major corporations both in the U.S. and abroad. Task Software is the transaction management provider for notable hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization software and pricing analytics for global retail chains, including Home Depot. Pros, known for its AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft for technology development.
The FTC aims to clarify this “opaque market” characterized by the categorization of shoppers and the implementation of 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,” stated 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 FTC is seeking information in four critical 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 practices on the prices consumers pay.