The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight companies across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have received inquiries from the FTC. The agency is seeking information about the effects of these pricing practices on privacy, competition, and consumer protection.
These companies utilize advanced data tools, often referred to as “surveillance pricing” or “dynamic pricing,” which allow them to offer varying prices for the same products based on individual consumer characteristics, such as location, demographics, credit score, and browsing or shopping history.
Many of the firms contacted by the FTC deliver transaction, sales, and pricing services for some of the largest companies in the United States and around the globe. Task Software manages transactions for key hospitality players like McDonald’s and Starbucks. Revionics provides retail price optimization solutions to several international chains, including Home Depot. Pros, which specializes in AI-driven pricing software, counts Nestlé, HP, and United Airlines among its clientele, and collaborates with Microsoft as a technology development partner.
The FTC aims to clarify the operations of this “opaque market” that assigns shoppers to categories and adjusts prices accordingly. 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. 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 specifically requesting information regarding four key areas: the types of surveillance pricing products and services offered, data collection methods, customer and sales information, and the impact of these practices on the prices consumers pay.