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.
The investigation targets eight companies from various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC issued orders to these firms seeking information on how their pricing tactics may affect privacy, competition, and consumer protection.
These companies utilize advanced data tools, including AI, to engage in a practice known as “surveillance pricing,” or sometimes “dynamic pricing.” This approach allows businesses to offer different prices for the same products, based on customers’ unique traits or behaviors, such as location, demographics, credit history, and online activity.
Many of the firms involved play key roles in providing transaction, sales, and pricing solutions to some of the largest companies in the U.S. and around the world. For instance, Task Software manages transactions for notable hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail pricing optimization and analytics, serving major chains such as Home Depot. Pros, which emphasizes its AI-driven pricing solutions, has an impressive clientele including Nestlé, HP, and United Airlines. It also collaborates with Microsoft in technology development.
The FTC aims to uncover the intricacies of this “opaque market,” where consumer categorization and targeted pricing systems are prevalent.
FTC Chair Lina Khan commented, “Companies that collect vast amounts of personal data are potentially endangering consumer privacy. There’s a possibility that these businesses exploit this personal information to set higher prices. Americans deserve transparency regarding whether their data is being used for surveillance pricing, and this inquiry will illuminate the murky terrain of pricing intermediaries.”
The FTC’s investigation will focus on four primary areas: the specific surveillance pricing products and services offered by each company, their data collection methods, details on customer and sales data, and the impact of these practices on the prices that customers pay.