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 from various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—received inquiries from the FTC, seeking details on the implications of these pricing practices on privacy, competition, and consumer protection.
These companies utilize data-driven approaches like “surveillance pricing” or “dynamic pricing,” which allow them to present different prices to consumers for identical products based on individual characteristics or behaviors. Variables affecting these prices can include location, demographics, credit history, and shopping habits.
Many of the firms involved play significant roles in providing transaction, sales, and pricing services to prominent businesses both in the United States and globally. Task Software is known for managing transactions for notable hospitality brands such as McDonald’s and Starbucks. Revionics specializes in retail price optimization software for major retailers including Home Depot. Pros offers AI-driven pricing solutions and counts Nestlé, HP, and United Airlines among its clients, alongside being a technology development partner of Microsoft.
The FTC aims to investigate what it describes as an “opaque market” that categorizes consumers and applies targeted pricing strategies.
“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,” FTC Chair Lina Khan stated. “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 seeking information in four primary areas: the nature of the surveillance pricing products and services each company offers, their data collection methods, customer and sales information, and the influence of these practices on the prices consumers ultimately pay.