The Federal Trade Commission (FTC) has initiated an investigation into several major companies concerning their utilization of customer data, algorithms, and artificial intelligence to customize pricing strategies.
Eight companies across various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—have received requests for information from the FTC regarding the effects of these pricing practices on privacy, competition, and consumer protection.
These firms are reportedly engaging in what is termed “surveillance pricing” or “dynamic pricing,” which involves displaying varying prices for the same products to different consumers based on characteristics such as location, demographics, credit history, and online behavior.
Many of the companies under investigation supply transaction, sales, and pricing services to some of the largest companies in the United States and worldwide. Task Software, for instance, specializes in transaction management for major hospitality brands, including McDonald’s and Starbucks. Revionics develops retail price optimization software for global chains, including Home Depot. Pros, which offers AI-powered pricing solutions, counts notable clients like Nestlé, HP, and United Airlines and collaborates with Microsoft in technology development.
The FTC aims to uncover details about the “opaque market” where consumers are classified and targeted with specific pricing for goods and services.
FTC Chair Lina Khan emphasized the risks associated with companies collecting personal data, 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 FTC’s investigation will focus on four main areas: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales information, and the impact of these surveillance practices on consumer pricing.