The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence in personalized pricing strategies.
Eight companies across various sectors—including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—received information requests from the FTC seeking information on how these practices may affect privacy, market competition, and consumer protection.
These companies employ a pricing strategy known as “surveillance pricing” or “dynamic pricing,” which allows them to present varying prices for the same products based on individual customer characteristics and behaviors. Factors that may influence pricing include a consumer’s location, demographics, credit history, and online shopping patterns.
Many of the companies involved in the inquiry offer transaction, sales, and pricing services to some of the largest firms domestically and internationally. Task Software manages transactions for major hospitality brands such as McDonald’s and Starbucks, while Revionics provides price optimization and analytics to global retailers like Home Depot. Pros, which specializes in AI-driven pricing solutions, counts clients such as Nestlé, HP, and United Airlines, and partners with Microsoft on technology development.
The FTC is focused on uncovering the complexities of this “opaque market,” which categorizes shoppers to set targeted pricing for goods and services.
“Companies that gather personal data can pose privacy risks to individuals. There is a concern that this information is being misused to impose higher prices,” stated FTC Chair Lina Khan. “Americans deserve transparency regarding whether businesses are utilizing personal data for surveillance pricing, and this inquiry aims to clarify the murky practices of pricing intermediaries.”
The FTC’s investigation is centered around four main areas: the types of surveillance pricing products and services offered by each company, data collection methods, customer and sales data, and the effect of these practices on the prices consumers ultimately pay.