The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their use of customer data, algorithms, and artificial intelligence to customize pricing.
The inquiry targets eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies have been ordered to provide information on how their pricing strategies impact privacy, competition, and consumer protection.
The FTC is examining the practice of “surveillance pricing,” also known as “dynamic pricing,” which allows companies to present varying prices for the same products based on consumer characteristics and behaviors such as location, demographics, credit history, and shopping history.
Many of the companies involved play significant roles in handling transaction, sales, and pricing services for numerous prominent firms in the U.S. and worldwide. Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics offers pricing analytics to global retailers such as Home Depot. Pros, which markets AI-driven pricing solutions, counts Nestlé, HP, and United Airlines among its clientele and partners with Microsoft for technology development.
FTC Chair Lina Khan commented on the investigation, highlighting concerns that companies utilizing Americans’ personal data might be compromising privacy and potentially charging higher prices. She emphasized the need for transparency regarding how businesses are leveraging detailed consumer information for surveillance pricing.
The FTC is seeking information in four primary areas: the types of surveillance pricing services provided, data collection methods, customer and sales data, and the effects of these practices on the prices consumers ultimately pay.