The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their customer data usage, algorithms, and artificial intelligence in relation to personalized pricing strategies.
A total of eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received requests for information from the FTC on Tuesday. The agency is examining the implications of these pricing practices for privacy, competition, and consumer protection.
These companies utilize data-driven techniques, referred to as “surveillance pricing” or “dynamic pricing,” to offer varying prices to consumers for identical products based on specific criteria such as location, demographics, credit history, and browsing habits.
Many of the firms involved in the investigation provide transaction, sales, and pricing services to a range of prominent businesses in the United States and internationally. Task Software supports major hospitality brands, including McDonald’s and Starbucks, while Revionics supplies retail price optimization and analytics software to chains like Home Depot. Pros, known for its AI-powered pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and operates as a technology partner for Microsoft.
The FTC aims to uncover details about this “opaque market” where customers are categorized, impacting the prices they see for goods and services.
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 FTC is seeking information on four main aspects: the types of surveillance pricing products and services offered by each company; data collection methods; customer and sales information; and the impact of these practices on pricing for consumers.