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.
A total of eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, were issued information requests by the agency. The FTC aims to understand how these pricing practices might affect privacy, competition, and consumer protection.
These companies utilize data tools, including AI, to implement a strategy referred to as “surveillance pricing,” or dynamic pricing, which adjusts prices for the same products based on individual consumer characteristics and behaviors such as location, demographics, credit history, and online shopping habits.
Many of the firms involved offer transaction, sales, and pricing solutions to some of the largest companies in the United States and around the world. Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics supplies retail price optimization tools to global chains including Home Depot. Pros, known for its AI-driven pricing solutions, serves clients including Nestlé, HP, and United Airlines, and partners with Microsoft for technology development.
The FTC’s objective is to clarify the “opaque market” that enables businesses to categorize shoppers and adjust prices accordingly.
“Firms that exploit Americans’ personal data can jeopardize individuals’ privacy. Moreover, these companies may be using an extensive amount of personal information to set higher prices,” stated FTC Chair Lina Khan. “Americans have the right to understand if companies are leveraging detailed consumer data for surveillance pricing, and the FTC’s investigation will illuminate this hidden pricing network.”
The FTC’s inquiry is focused on four primary areas: the types of surveillance pricing products and services provided, the methods of data collection, information on customers and sales, and the impact of these surveillance practices on the prices consumers pay.