The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to create personalized pricing strategies. The companies under scrutiny include Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC issued orders to these firms seeking detailed information on how these pricing practices affect privacy, competition, and consumer protection.
These companies utilize data analytics, including AI, in a practice referred to as “surveillance pricing” or “dynamic pricing.” This strategy allows them to display different prices for the same products to different consumers, based on factors such as location, demographics, credit history, and browsing or shopping patterns.
Many of the companies implicated provide transaction, sales, and pricing solutions to significant businesses in the United States and around the world. Notably, Task Software manages transactions for major hospitality chains like McDonald’s and Starbucks, while Revionics specializes in retail price optimization for various global retailers such as Home Depot. Pros, which claims to deliver AI-driven pricing solutions, serves notable clients including Nestlé, HP, and United Airlines and partners with Microsoft in technology development.
The FTC aims to understand the nature of this “opaque market” that profiles consumers to establish targeted pricing. FTC Chair Lina Khan emphasized the potential risks to personal privacy, stating that firms leveraging Americans’ personal data might exploit that information to set higher prices. She asserted that consumers have the right to know if their data is being used to implement surveillance pricing, and the FTC’s investigation will provide clarity on this complex pricing ecosystem.
The commission is specifically seeking information in four main areas: the types of surveillance pricing products and services offered by each company, data collection methods, customer and sales information, and the impact of these surveillance practices on consumer pricing.