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.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received inquiries from the FTC seeking information on how these practices affect privacy, market competition, and consumer protection.
These companies utilize data tools, such as AI, in a method known as “surveillance pricing” or “dynamic pricing,” where varying prices for the same products are presented to consumers depending on their characteristics or behaviors, which may include location, demographics, credit history, and online shopping habits.
The firms being investigated are known for providing transaction, sales, and pricing services to some of the largest companies in the United States and around the world. Task, for example, manages transactions for major hospitality brands like McDonald’s and Starbucks. Revionics is known for its retail price optimization software used by chains including Home Depot, while Pros offers AI-based pricing solutions to clients such as Nestlé, HP, and United Airlines, and partners with Microsoft for technology development.
The FTC is aiming to clarify this “opaque market” that targets shoppers and sets customized pricing 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 focusing its investigation on four primary areas: the types of surveillance pricing products and services offered by each company; data collection methods; customer and sales information; and the impact of these surveillance practices on the prices consumers ultimately pay.