The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to implement personalized pricing strategies.
Eight firms from various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Company, Revionics, Bloomreach, and Pros—received information requests from the FTC on Tuesday. The agency seeks to examine how these pricing tactics may affect privacy, competition, and consumer protection.
Companies utilize data-driven approaches, known as “surveillance pricing” or “dynamic pricing,” to offer different prices for the same products based on consumer attributes such as location, demographics, credit history, and online activity.
Many of the firms approached by the FTC supply transaction, sales, and pricing solutions to major corporations within the U.S. and around the world. Task Software supports several significant hospitality brands, including McDonald’s and Starbucks. Revionics delivers pricing optimization software and analytics for well-known retail chains, such as Home Depot. Pros specializes in AI-driven pricing solutions and counts companies like Nestlé, HP, and United Airlines among its clients, and is also a technology development partner of Microsoft.
Through this investigation, the FTC aims to clarify the “opaque market” that profiles consumers and sets tailored prices for various products and services.
FTC Chair Lina Khan commented, “Companies that collect Americans’ personal data can jeopardize individuals’ privacy. It appears that they might be using extensive personal information to impose higher prices on consumers. Americans have the right to understand whether their detailed data is being used for surveillance pricing, and this inquiry will provide insight into the obscure world of pricing intermediaries.”
The FTC is focusing on four main areas: the types of surveillance pricing products and services offered by each company; methods of data collection; information on customers and sales; and the influence of these surveillance practices on the prices consumers ultimately pay.