The Federal Trade Commission (FTC) has initiated an investigation into several prominent firms regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The FTC has issued inquiries to eight companies across various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These requests are aimed at understanding the implications of such pricing practices on privacy, competition, and consumer protection.
These companies utilize data-driven strategies, referred to as “surveillance pricing” or “dynamic pricing,” which enables them to present varied prices to different consumers based on their individual characteristics or behaviors. Factors such as location, demographics, credit history, and online shopping patterns can influence the pricing seen by consumers.
Many of the involved companies play significant roles in transaction, sales, and pricing services for major businesses both in the U.S. and around the world. Task Software provides transaction management solutions for several large hospitality brands, including McDonald’s and Starbucks. Revionics, known for its retail price optimization technology, serves numerous global retailers, including Home Depot. Pros, which offers AI-driven pricing solutions, works with notable clients such as Nestlé, HP, and United Airlines, and partners with Microsoft on technology development.
The FTC aims to clarify the workings of this “opaque market” that assesses consumers and determines specific prices for various products and services.
“Companies that utilize Americans’ personal data may put consumer privacy at risk. There is a concern that these companies could be using extensive personal information to charge higher prices,” stated FTC Chair Lina Khan. “Americans have the right to know if businesses are leveraging detailed consumer data for surveillance pricing, and the FTC’s inquiry will illuminate this obscure network of pricing facilitators.”
The FTC’s investigation focuses on four primary aspects: the types of surveillance pricing products and services offered, data collection methods, customer and sales information, and the influence of these practices on the prices that consumers pay.