The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their usage of customer data, algorithms, and artificial intelligence for personalized pricing strategies. The inquiry includes eight firms from various sectors: Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies have been ordered to provide information on how their pricing practices affect privacy, competition, and consumer protection.
These companies use what is known as “surveillance pricing” or “dynamic pricing,” which allows them to present different prices for identical products based on consumers’ specific traits or behaviors. Factors such as location, demographics, credit history, and online activity can influence pricing.
Among the firms contacted, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization and analytics for global retailers, including Home Depot. Pros, which markets itself as a provider of AI-driven pricing solutions, counts brands like Nestlé, HP, and United Airlines among its clients and collaborates with Microsoft on technology development.
The FTC aims to clarify the workings of this “opaque market” that profiles customers and creates targeted pricing models. FTC Chair Lina Khan commented on the potential risks to consumer privacy, stating, “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 is seeking details on four primary areas: the types of surveillance pricing products and services offered, data collection methods, customer and sales information, and the impact of these practices on the prices customers ultimately pay.