The Federal Trade Commission (FTC) has initiated an investigation into several major corporations concerning their use of customer data, algorithms, and artificial intelligence to customize pricing for consumers.
Eight companies from various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received formal requests from the FTC on Tuesday. The agency aims to gather insights into how these pricing strategies affect privacy, competition, and consumer protection.
These businesses utilize data tools, commonly referred to as “surveillance pricing” or “dynamic pricing,” which enable them to present different prices for identical products based on specific consumer attributes or behaviors. Factors such as location, demographics, credit history, and online browsing or shopping habits can influence these tailored prices.
Many of the firms under scrutiny provide transaction, sales, and pricing services to significant companies in the United States and internationally. For instance, Task is involved in transaction management for prominent hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization software used by global chains such as Home Depot. Pros markets itself as a provider of AI-powered pricing solutions, serving clients including Nestlé, HP, and United Airlines, and it collaborates with Microsoft on technology development.
The FTC is aiming to uncover the complexities of this “opaque market,” which categorizes consumers and assigns targeted prices for various products and services. FTC Chair Lina Khan emphasized the risks to privacy posed by companies that utilize personal data and hinted at potential exploitation of this information to impose higher prices. She 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 on four main aspects: the kinds of surveillance pricing products and services offered by each company, methods of data collection, customer and sales data, and the impact of these surveillance practices on the prices that consumers ultimately pay.