The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to customize pricing for individuals.
Nvidia is currently facing one of its most volatile weeks on the stock market.
The FTC has issued information requests to eight companies across various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—seeking insights into how these pricing strategies affect privacy, competition, and consumer protection.
These companies engage in a practice termed “surveillance pricing,” or “dynamic pricing,” which allows them to present different prices to consumers for identical products based on various factors such as location, demographics, credit history, and online behavior.
Many of the firms under investigation provide transaction, sales, and pricing services to some of the largest businesses in the United States and worldwide. Task Software manages transactions for notable hospitality brands like McDonald’s and Starbucks. Revionics offers retail price optimization software to major retailers, including Home Depot. Pros specializes in AI-driven pricing solutions and serves clients like Nestlé, HP, and United Airlines, and partners with Microsoft in technology development.
The FTC aims to uncover the intricacies of this “opaque market” that categorizes consumers and applies targeted pricing for products and services.
“Companies that collect Americans’ personal data can jeopardize individuals’ privacy. It is plausible that these companies may exploit this extensive personal information to impose higher prices,” stated FTC Chair Lina Khan. “Consumers have the right to understand whether businesses utilize extensive consumer data to implement surveillance pricing, and the FTC’s investigation will illuminate this obscure pricing landscape.”
The FTC’s inquiry focuses on four main areas: the range of surveillance pricing products and services each company provides; their data collection methods; customer and sales data; and the impact of these surveillance tactics on the prices consumers ultimately pay.