The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to create personalized pricing strategies.
On Tuesday, the FTC issued orders to eight firms—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—requesting information on how these pricing methods affect privacy, competition, and consumer protection.
These companies utilize data tools, including AI, to implement a practice known as “surveillance pricing” or “dynamic pricing,” where different prices are displayed to consumers for the same products based on personal attributes such as location, demographics, credit history, and online behavior.
Many of the firms under scrutiny play significant roles in providing transactional, sales, and pricing services to major U.S. and global businesses. For instance, Task Software manages transactions for big names in hospitality like McDonald’s and Starbucks, while Revionics offers retail price optimization software to global chains, including Home Depot. Pros markets itself as an AI-driven pricing solutions provider, serving clients like Nestlé, HP, and United Airlines, and collaborates with Microsoft for technology development.
The FTC aims to clarify the “opaque market” that classifies consumers and applies specific prices to goods and services. Chair Lina Khan stated that businesses utilizing American consumers’ personal data must be transparent. She emphasized that consumers deserve to know if and how their data is used to implement surveillance pricing, indicating that the FTC’s inquiry will go into the complexities involved in the pricing practices of these companies.
The agency is seeking details in four main areas: the types of surveillance pricing services offered by each company, methods of data collection, customer and sales data, and the effect these practices have on the pricing customers ultimately pay.