The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
As part of this inquiry, eight firms—including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—received information requests from the regulatory body on Tuesday. The FTC aims to assess how these pricing practices affect privacy, competition, and consumer protection.
These businesses utilize data-driven techniques like “surveillance pricing,” also known as “dynamic pricing,” to display different prices for identical products based on various consumer factors, such as location, demographics, credit history, and online behavior.
Many of the companies under investigation offer transaction and pricing services to some of the largest businesses both in the United States and internationally. Task Software is known for managing transactions for major hospitality brands such as McDonald’s and Starbucks. Revionics specializes in retail price optimization and analytics for clients including Home Depot, while Pros, which labels itself as a provider of AI-driven pricing solutions, has clients like Nestlé, HP, and United Airlines. Additionally, it collaborates with Microsoft on technology development.
The FTC’s inquiry aims to clarify the opaque practices involved in categorizing consumers and setting targeted prices. FTC Chair Lina Khan emphasized the potential risks posed to consumer privacy, stating, “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.” Khan added that the investigation seeks to uncover whether businesses are leveraging detailed consumer data for surveillance pricing, shining a light on this obscure pricing ecosystem.
The commission is specifically seeking information about the types of surveillance pricing services offered by each company, methods of data collection, customer and sales data, and the overall impact of these practices on consumer pricing.