The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight companies—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—received requests from the FTC for information on how these pricing practices affect privacy, competition, and consumer protection.
These companies utilize data-driven methods, often referred to as “surveillance pricing” or “dynamic pricing,” which allows them to present varied prices to different consumers for the same products based on individual characteristics such as location, demographics, credit history, and browsing or shopping activity.
Many of the firms under scrutiny provide transaction, sales, and pricing services to some of the largest businesses both in the United States and around the world. Task Software underpins transaction management for major hospitality brands like McDonald’s and Starbucks. Revionics offers retail price optimization solutions to global retailers including Home Depot. Pros specializes in AI-driven pricing solutions and has notable clients such as Nestlé, HP, and United Airlines, and it partners with Microsoft on technology development.
The FTC aims to address concerns surrounding this “opaque market” that categorizes consumers and sets tailored prices for goods and services.
“Companies that collect personal data from Americans pose risks to privacy. Now, these companies might be leveraging this extensive personal information to impose higher prices,” remarked FTC Chair Lina Khan. “Americans deserve transparency about whether businesses are utilizing detailed consumer data for surveillance pricing, and the FTC’s investigation will clarify this often unseen network of pricing intermediaries.”
The FTC is particularly focused on four areas: the types of surveillance pricing products and services offered, methods of data collection, customer and sales information, and the impact of these surveillance practices on consumer pricing.