The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their practices related to customer data, algorithms, and artificial intelligence in creating personalized pricing strategies.
The firms under scrutiny include Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies have been ordered to provide information concerning the implications of their pricing methods on privacy, competition, and consumer protection.
Utilizing advanced data tools, firms have adopted a strategy known as “surveillance pricing” or “dynamic pricing,” which allows them to display varying prices to different consumers for identical products based on individual characteristics and behaviors, such as location, demographics, credit history, and browsing habits.
Many of the companies involved offer transaction, sales, and pricing services to some of the largest corporations in the U.S. and around the world. For instance, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail pricing optimization and analytics for global retail chains, including Home Depot. Similarly, Pros provides AI-driven pricing solutions to clients like Nestlé, HP, and United Airlines and collaborates with Microsoft as a technology development partner.
The FTC aims to investigate the complexities surrounding this “opaque market,” where consumer categorization leads to targeted pricing strategies. FTC Chair Lina Khan stated, “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 agency is seeking insights in four primary areas: the types of surveillance pricing products offered, data collection methods, customer and sales information, and the impact of these practices on consumer pricing.