The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received inquiries from the FTC on Tuesday. The agency is seeking information about how these practices affect privacy, competition, and consumer protection.
Through data tools and technologies such as AI, these companies engage in a practice referred to as “surveillance pricing” or “dynamic pricing.” This approach enables them to present varying prices to different consumers based on attributes such as location, demographics, credit history, and online activity.
Many of the firms under scrutiny offer transaction, sales, and pricing solutions to notable businesses across the U.S. and around the world. For example, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization and offers pricing analytics to major chains, including Home Depot. Pros, which provides AI-powered pricing solutions, has clients such as Nestlé, HP, and United Airlines, and partners with Microsoft for technology development.
The FTC aims to uncover more about this “opaque market,” which categorizes consumers and assigns targeted pricing for various goods and services.
FTC Chair Lina Khan emphasized the potential risks to privacy that come with companies collecting personal data. She stated, “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 agency is focusing its inquiry on four main areas: the types of surveillance pricing tools and services offered by the companies, their data collection methods, customer and sales information, and the effect of these practices on the prices paid by customers.