The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence in pricing strategies targeted at individual consumers.
Among the companies being scrutinized are Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC issued orders to these eight firms, seeking insights into how their pricing practices impact privacy, competition, and consumer protection.
Many of these companies use advanced data tools and a method known as “surveillance pricing,” or “dynamic pricing,” wherein consumers are presented with different prices for the same products based on various factors such as location, demographics, credit history, and online behavior.
Notably, Task Software manages transactions for several well-known hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization software and works with major chains like Home Depot. Pros, which focuses on AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and partners with Microsoft for technology development.
The FTC aims to clarify the workings of this “opaque market” that segments consumers and establishes targeted pricing for various goods and services. FTC Chair Lina Khan emphasized the potential risks to consumer privacy and the possibility that businesses could be using personal data to impose higher prices. The inquiry aims to illuminate the “shadowy ecosystem” involving pricing intermediaries.
The FTC is specifically seeking information in four main areas: the range of surveillance pricing products and services offered by these firms; their data collection methods; customer and sales information; and the influence of these surveillance practices on the final prices that consumers pay.