The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use 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, were contacted by the FTC on Tuesday. The agency is seeking insights into how these pricing practices impact privacy, competition, and consumer protection.
These companies utilize data tools and a practice known as “surveillance pricing,” or “dynamic pricing,” which allows them to present varying prices to consumers based on their unique characteristics or behaviors. Factors such as location, demographics, credit history, and online shopping history can influence these individualized prices.
The firms under scrutiny often provide transaction and pricing services to some of the largest businesses both in the U.S. and internationally. Task Software, for example, manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics offers retail price optimization software to chains like Home Depot. Pros, which markets itself as a provider of AI-driven pricing solutions, works with clients including Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to clarify this “opaque market” that differentiates shoppers and assigns targeted prices to various products and services. FTC Chair Lina Khan highlighted the risks to consumer privacy, 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 is focusing on four main aspects: the specific surveillance pricing products and services offered by these companies; their data collection methods; customer and sales information; and the influence of these surveillance practices on the final prices consumers pay.