The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing strategies.
On Tuesday, the FTC issued orders to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking information about how these pricing practices affect privacy, competition, and consumer protection.
These companies utilize data tools in a practice referred to as “surveillance pricing,” also known as “dynamic pricing.” This approach enables firms to present different prices for the same products to different consumers based on factors such as location, demographics, credit history, and online behaviors like browsing and shopping histories.
Many of the companies under investigation provide transaction, sales, and pricing services to some of the largest firms both in the U.S. and internationally. For example, Task Software manages transactions for major hospitality brands, including McDonald’s and Starbucks, while Revionics offers retail price optimization services to global chains like Home Depot. Additionally, Pros, which markets AI-driven pricing solutions, serves notable clients such as Nestlé, HP, and United Airlines, and is also a technology partner of Microsoft.
The FTC aims to clarify what it describes as an “opaque market” that categorizes consumers and assigns targeted prices based on their profiles. FTC Chair Lina Khan remarked, “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 critical areas: the types of surveillance pricing products and services offered by each company, methods of data collection, customer and sales data, and the impact of these practices on the final prices customers pay.