The Federal Trade Commission (FTC) has initiated an investigation into several major companies concerning their practices of using customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight companies from different sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, were issued requests for information by the FTC. The agency seeks to understand the implications of these pricing strategies on consumer privacy, competition, and protection.
These companies utilize sophisticated data tools, such as AI, to implement what is known as “surveillance pricing,” or “dynamic pricing.” This method allows them to present varying prices to consumers based on individual traits or behaviors, such as geographical location, demographics, credit history, and online shopping habits.
Many of the firms under scrutiny provide transaction, sales, and pricing services to both prominent U.S. organizations and global enterprises. For example, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics specializes in retail price optimization software used by chains like Home Depot. Pros, a company focused on AI-driven pricing solutions, serves clients including Nestlé, HP, and United Airlines, and collaborates with Microsoft for technology development.
The FTC aims to clarify the operations of this “opaque market,” which assigns shoppers into categories and sets targeted prices for various products and services.
FTC Chair Lina Khan highlighted the risks associated with companies collecting extensive personal data. “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,” she stated.
The FTC’s investigation will focus on four main areas: the types of surveillance pricing products and services provided by each company, the methods of data collection, customer and sales information, and the impact of these surveillance practices on the pricing faced by consumers.