The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence in setting personalized pricing.
On Tuesday, the FTC sent information requests to eight firms—including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—seeking details about the implications of these pricing strategies on consumer privacy, competition, and protection.
These companies utilize data-driven methodologies, often referred to as “surveillance pricing” or “dynamic pricing,” which allows them to present varying prices to consumers for identical products based on factors like location, demographics, credit history, and shopping behavior.
Among those under scrutiny, Task Software manages transactions for notable hospitality brands such as McDonald’s and Starbucks. Revionics specializes in retail price optimization tools for major retailers, including Home Depot, while Pros provides AI-driven pricing solutions for high-profile clients like Nestlé, HP, and United Airlines, and collaborates with Microsoft as a technology partner.
The FTC aims to investigate what it calls an “opaque market” that categorizes consumers and sets targeted prices accordingly.
FTC Chair Lina Khan emphasized concerns about personal data misuse, 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. 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 particularly interested in four areas of investigation: the types of surveillance pricing products and services provided by each company, data collection methods, customer and sales data, and the influence of surveillance practices on consumer pricing.