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 inquiry involves eight firms: Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies have been requested to provide information on how their pricing practices affect privacy, competition, and consumer protection.
The practice in question, known as “surveillance pricing” or “dynamic pricing,” allows companies to show varying prices to different consumers based on specific characteristics or behaviors such as location, demographics, credit history, and shopping habits. Many of the firms under investigation offer transactional, sales, and pricing services to some of the largest businesses in the U.S. and worldwide. For example, Task Software provides transaction management for major hospitality brands like McDonald’s and Starbucks, while Revionics supplies price optimization software to retailers including Home Depot. Pros specializes in AI-driven pricing solutions, serving clients such as Nestlé, HP, and United Airlines, and is also a technology partner with Microsoft.
The FTC aims to clarify what it describes as an “opaque market” that categorizes consumers to implement targeted pricing strategies. FTC Chair Lina Khan emphasized that companies utilizing consumer data could potentially jeopardize individuals’ privacy and might exploit this information to charge higher prices. She stated, “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 commission is focusing on four main areas: the types of surveillance pricing products and services offered by the companies, the methods of data collection, customer and sales data, and the influence of these pricing practices on the final prices that customers are required to pay.