The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their use of customer data, algorithms, and artificial intelligence to customize pricing strategies.
On Tuesday, the agency issued orders to eight companies across various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—seeking insights into how these practices affect privacy, competition, and consumer protection.
These corporations engage in a method known as “surveillance pricing” or “dynamic pricing,” where they present different prices to consumers for identical products, influenced by various factors such as location, demographics, credit history, and online behavior.
Many firms under scrutiny provide transaction, sales, and pricing services for major U.S. and international businesses. For instance, Task Software is involved in transaction management for several top hospitality chains like McDonald’s and Starbucks. Revionics specializes in retail price optimization software for notable retailers, including Home Depot, while Pros, which promotes its AI-driven pricing solutions, counts Nestlé, HP, and United Airlines as clients and partners with Microsoft in technology development.
The FTC aims to investigate what it describes as an “opaque market,” which categorizes consumers and establishes targeted pricing for various 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 agency is focusing on four primary areas: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales information, and the impact of these surveillance practices on consumer pricing.