The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The investigation targets eight companies across various industries, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC has issued orders for information on how these pricing practices affect privacy, competition, and consumer protection.
These companies utilize tools such as AI to implement “surveillance pricing,” also known as “dynamic pricing.” This allows them to display different prices for the same products, based on factors like location, demographics, credit history, and browsing or shopping habits.
Many of the companies involved provide transaction and pricing services to major brands globally. Task Software manages transactions for well-known hospitality chains like McDonald’s and Starbucks. Revionics offers retail price optimization and analytics tools to companies including Home Depot. Pros specializes in AI-driven pricing solutions and serves clients such as Nestlé, HP, and United Airlines, also partnering with Microsoft on technology development.
The FTC aims to investigate this “opaque market” that allows businesses to categorize consumers and set targeted pricing for their offerings.
FTC Chair Lina Khan stated, “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 agency’s investigation will focus on four main areas: the types of surveillance pricing services offered by each company, the methods of data collection, customer and sales information, and how these practices affect the prices consumers pay.