The Federal Trade Commission (FTC) has initiated an investigation involving several major corporations regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The FTC has issued inquiries to eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency seeks to understand how these pricing strategies affect consumer privacy, competition, and protection.
These firms implement a method termed “surveillance pricing” or “dynamic pricing,” where different consumers may see varying prices for the same products based on factors like location, demographics, credit history, and browsing or shopping behavior.
Many of the companies engaged by the FTC offer transaction, sales, and pricing services to significant businesses across the United States and worldwide. Task Software oversees transaction management for well-known hospitality brands such as McDonald’s and Starbucks. Revionics supplies price optimization software and pricing analytics to global retail chains like Home Depot. Pros, which markets AI-driven pricing solutions, counts major firms like Nestlé, HP, and United Airlines as clients and also partners in technology development with Microsoft.
The FTC aims to clarify the “opaque market” that characterizes shoppers and sets targeted pricing for goods and services.
“Companies that collect personal data from Americans can jeopardize individuals’ privacy. They may exploit this extensive data to impose higher prices,” stated FTC Chair Lina Khan. She emphasized that consumers have a right to understand if businesses are using detailed data for surveillance pricing, and the inquiry aims to illuminate this unclear market of pricing intermediaries.
The FTC is gathering information on four main areas: the surveillance pricing products and services each firm offers, their data collection methods, customer and sales data, and how such practices impact the pricing that consumers ultimately face.