The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing. Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have been ordered to provide information about how these pricing strategies affect privacy, competition, and consumer protection.
These companies utilize data-driven tools, often referred to as “surveillance pricing” or “dynamic pricing,” to present different prices for the same products based on individual customer characteristics or behaviors. Factors influencing these price variations may include location, demographics, credit history, and users’ browsing or shopping activities.
Many of the firms involved in this investigation offer transaction and pricing services to some of the largest corporations both in the U.S. and internationally. For instance, Task Software is connected with major hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization tools for global chains such as Home Depot. Pros, which identifies itself as a provider of AI-driven pricing solutions, has notable clients including Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to investigate this “opaque market” that categorizes shoppers and establishes targeted pricing for goods and services. FTC Chair Lina Khan emphasized the risks to consumer privacy, stating, “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.” She added that Americans deserve transparency regarding businesses’ usage of detailed consumer data for surveillance pricing, and the inquiry will help clarify the intricate network of pricing intermediaries.
The FTC seeks information on four primary aspects: the types of surveillance pricing services offered, data collection methods, customer and sales information, and the impact of these practices on consumer pricing.