The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of consumer data, algorithms, and artificial intelligence to personalize pricing strategies.
Eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received requests from the FTC on Tuesday for information concerning how these pricing practices may impact privacy, competition, and consumer protection.
These companies employ data-driven strategies, often termed “surveillance pricing” or “dynamic pricing,” to present varying prices to consumers based on their individual characteristics and behaviors, such as location, demographics, credit scores, and shopping habits.
Many of the firms being investigated provide transaction, sales, and pricing services to some of the largest companies in the U.S. and around the world. For example, Task Software assists major hospitality brands like McDonald’s and Starbucks, while Revionics offers retail pricing optimization software to global chains such as Home Depot. Pros, known for its AI-driven pricing solutions, serves clients including Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to clarify this “opaque market,” where customers are categorized and targeted with specific prices for goods and services. FTC Chair Lina Khan emphasized the potential risks to consumer privacy as companies may exploit vast amounts of personal data to set higher prices. She stated that Americans deserve transparency about whether businesses are employing these detailed data analytics for surveillance pricing, and that the FTC’s investigation will provide insight into this complex pricing landscape.
The FTC is specifically seeking information on four important aspects: the types of surveillance pricing services offered by each company, their data collection methods, customer and sales data, and the effects of these practices on the prices customers ultimately pay.