The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their practices related to customer data, algorithms, and the use of artificial intelligence in setting individualized pricing. The focus is on eight companies—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—which received orders for information concerning the implications of these pricing strategies on privacy, competition, and consumer protection.
These firms utilize tools such as AI to practice what is known as “surveillance pricing,” also referred to as “dynamic pricing.” This approach allows companies to offer different prices for the same products to varying consumers based on numerous factors, including location, demographics, credit history, and online behavior.
Many of the companies under scrutiny by the FTC provide transaction, sales, and pricing services to some of the largest firms in the United States and worldwide. Task Software manages transactions for well-known hospitality brands such as McDonald’s and Starbucks, while Revionics offers retail price optimization and analytics for major chains, including Home Depot. Pros, known for its AI-driven pricing solutions, serves high-profile clients such as Nestlé, HP, and United Airlines and collaborates with Microsoft.
The FTC aims to clarify the workings of this “opaque market,” which categorizes consumers and determines targeted pricing for various products and services. FTC Chair Lina Khan expressed concerns about the potential risks to consumers’ privacy, stating, “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 commission is seeking information in four primary areas: the specific surveillance pricing products and services each company provides, the methods of data collection, customer and sales information, and how these practices affect the prices consumers ultimately pay.