The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to customize pricing strategies.
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The FTC has issued information requests to eight companies across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking insights on how these practices affect privacy, competition, and consumer protection.
The practice known as “surveillance pricing,” or “dynamic pricing,” utilizes data tools to present varying prices to consumers for identical products depending on individual characteristics or behaviors. These factors can include a consumer’s location, demographics, credit score, and their browsing or shopping habits.
Many of the firms in question provide transaction, sales, and pricing services to major corporations both in the United States and internationally. Task Software manages transactions for notable hospitality brands, including McDonald’s and Starbucks. Revionics delivers retail price optimization software to several global chains such as Home Depot. Pros, which specializes in AI-driven pricing solutions, counts Nestlé, HP, and United Airlines among its clients and collaborates with Microsoft on technology development.
The FTC aims to clarify the complexities of this “opaque market,” which profiles shoppers and establishes targeted pricing.
FTC Chair Lina Khan emphasized the potential risks associated with the collection of personal data by companies, 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. 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 FTC is seeking information in four critical areas: the types of surveillance pricing products and services each company provides; the methods of data collection; customer and sales data; and the influence of these surveillance practices on the prices customers pay.