The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of consumer data, algorithms, and artificial intelligence for customized pricing strategies.
Eight companies have been ordered to provide information on the implications of their pricing tactics for privacy, competition, and consumer protection. These firms include Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros.
The practice under scrutiny, often referred to as “surveillance pricing” or “dynamic pricing,” allows businesses to present varying prices for the same products to different consumers based on various factors such as location, demographics, credit history, and online shopping behavior.
Many of the firms contacted by the FTC play significant roles in transactions, sales, and pricing for major U.S. and international corporations. Task Software supports transaction management for well-known hospitality brands, including McDonald’s and Starbucks, while Revionics offers retail pricing optimization tools for companies like Home Depot. Pros, which specializes in AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and partners with Microsoft in technology development.
The FTC aims to clarify the workings of this “opaque market” that identifies shoppers and determines targeted pricing for goods and services. FTC Chair Lina Khan emphasized, “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 agency is seeking information in four main areas: the types of surveillance pricing services each company offers; the methods of data collection; customer and sales data; and the impact of these practices on consumer pricing.