The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their usage of customer data, algorithms, and artificial intelligence to implement personalized pricing strategies.
Eight companies across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received requests from the FTC for information on how these pricing practices impact privacy, competition, and consumer protection.
These companies employ data tools, including AI, to engage in a practice known as “surveillance pricing” or “dynamic pricing,” which allows them to display different prices to customers for the same products based on individual characteristics or behaviors, such as location, demographics, credit history, and online activity.
Many of the firms contacted by the FTC offer transaction, sales, and pricing services to major corporations in the U.S. and around the world. For example, Task Software handles transaction management for notable hospitality brands like McDonald’s and Starbucks, while Revionics provides pricing optimization software to various retail chains, including Home Depot. Pros, which specializes in AI-powered pricing solutions, lists Nestlé, HP, and United Airlines among its clients and collaborates with Microsoft for technology development.
The FTC aims to investigate this “opaque market” that employs customer categorization for targeted pricing of goods and services. FTC Chair Lina Khan emphasized the risks associated with companies collecting personal data, warning that they could exploit this information to impose higher prices. She stated, “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’s investigation will focus on four primary areas: the kinds of surveillance pricing products and services offered by each company, the data collection methods, customer and sales information, and the influence of these practices on the final prices paid by consumers.