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.
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The FTC issued orders to eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking insights into how their pricing methods affect privacy, competition, and consumer protection.
These firms utilize data tools, such as AI, to implement a practice known as “surveillance pricing,” also referred to as “dynamic pricing.” This approach allows them to present varying prices to consumers for identical products based on factors such as location, demographics, credit history, and online behavior.
Many of the companies under scrutiny by the FTC provide transaction, sales, and pricing services to prominent businesses both in the U.S. and internationally. Task Software supports transaction management for major hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization software and pricing analytics for global retailers, including Home Depot. Pros, which markets itself as a provider of AI-driven pricing solutions, counts Nestlé, HP, and United Airlines among its clientele and partners with Microsoft for technology development.
The FTC aims to investigate the “opaque market” that sorts consumers and establishes targeted pricing for products and services.
FTC Chair Lina Khan remarked, “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 particularly interested in four main aspects: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales information, and the ways these surveillance practices affect the prices that consumers pay.