The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their practices surrounding customer data, algorithms, and artificial intelligence in relation to personalized pricing.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received requests for information from the FTC on Tuesday. The agency is seeking insights into how these pricing strategies impact privacy, competition, and consumer protection.
The companies under scrutiny utilize “surveillance pricing,” also known as “dynamic pricing,” which allows them to offer varying prices for the same products based on individual consumer characteristics or behaviors. Factors considered may include location, demographics, credit history, and online activity.
Among these firms, several play significant roles in providing transaction, sales, and pricing services to major U.S. and global enterprises. Task Software manages transactions for notable names like McDonald’s and Starbucks. Revionics specializes in retail price optimization and analytics for brands like Home Depot, while Pros offers AI-driven pricing solutions to clients that include Nestlé, HP, and United Airlines, and also collaborates with Microsoft.
The FTC aims to clarify this “opaque market” that categorizes consumers and establishes targeted pricing for various products and services. “Companies that gather Americans’ personal data risk compromising their privacy,” stated FTC Chair Lina Khan. “Currently, they may be using this extensive personal information to impose higher charges. Americans need to know if businesses are utilizing detailed consumer data for surveillance pricing, and this inquiry will illuminate the murky ecosystem of pricing intermediaries.”
The FTC’s investigation will focus on four main areas: the types of surveillance pricing services offered by each company, their data collection methods, customer and sales information, and the effect of these practices on the pricing customers ultimately face.