The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their practices related to customer data, algorithms, and artificial intelligence used for individualized pricing strategies.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have been contacted by the FTC to provide details about how these pricing methods impact privacy, competition, and consumer protection.
These companies utilize data tools to implement “surveillance pricing” or “dynamic pricing,” which involves showing varying prices to consumers for identical products based on specific factors such as location, demographics, credit history, and shopping behavior.
Many firms under scrutiny offer transaction, sales, and pricing services to some of the largest businesses in the U.S. and internationally. For instance, Task Software manages transactions for prominent hospitality brands like McDonald’s and Starbucks, while Revionics supplies pricing optimization software to major retailers, including Home Depot. Pros, which focuses on AI-driven pricing solutions, counts Nestlé, HP, and United Airlines among its clients and collaborates with Microsoft on technology development.
The FTC aims to investigate this “opaque market” that classifies consumers and sets targeted pricing for goods and services.
FTC Chair Lina Khan expressed concerns about the risks to consumer privacy posed by companies collecting personal data. She stated, “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 seeking information on four main aspects: the types of surveillance pricing products offered by these companies, their data collection methods, customer and sales information, and the influence of these practices on the prices consumers ultimately pay.