FTC Probes Major Firms Over Controversial ‘Surveillance Pricing’ Tactics

by

in

The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to customize pricing on an individual basis.

On Tuesday, the regulatory agency issued requests for information to eight firms spanning various industries, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The aim is to assess how these pricing strategies affect privacy, competition, and consumer protection.

Companies employ tools like AI to implement a practice known as “surveillance pricing,” or “dynamic pricing,” which allows them to display distinct prices for the same products to different consumers based on individual characteristics or behaviors. Factors influencing these prices can include location, demographics, credit history, as well as browsing and shopping history.

Many of the firms involved provide transaction, sales, and pricing services to some of the largest businesses in the U.S. and worldwide. For instance, Task Software handles transaction management for major hospitality entities such as McDonald’s and Starbucks, while Revionics specializes in pricing optimization software for retail chains, including Home Depot. Pros, which offers AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.

The FTC is seeking to clarify this “opaque market” that characterizes consumers and assigns targeted prices for products and services. FTC Chair Lina Khan stated, “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 focusing on four primary areas: the types of surveillance pricing products and services offered by each company; the methods of data collection; customer and sales information; and the influence of these practices on the prices customers ultimately pay.

Popular Categories


Search the website