The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies concerning their use of customer data, algorithms, and artificial intelligence to customize pricing strategies.
Eight firms from various sectors — Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros — received inquiries from the FTC on Tuesday. The regulatory body is seeking to understand how these practices affect privacy, competition, and consumer protection.
These companies employ techniques known as “surveillance pricing” or “dynamic pricing,” which enable them to display different prices to consumers based on individual characteristics or behaviors, including location, demographics, credit history, and online shopping habits.
Many firms mentioned in the FTC’s inquiry provide transaction, sales, and pricing services to some of the largest companies both in the U.S. and globally. Task Software, for example, manages transactions for major hospitality brands like McDonald’s and Starbucks. Revionics offers retail price optimization tools to numerous global chains, such as Home Depot. Pros, which presents itself as a provider of AI-driven pricing solutions, serves clients including Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to clarify the complexities of the market that segments consumers and sets targeted prices for various products and services.
FTC Chair Lina Khan stated, “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 agency is focusing its investigation on four main areas: the types of surveillance pricing products and services offered by each company, data collection methods, customer and sales data, and the impact of these surveillance practices on the prices consumers ultimately pay.