The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence in personalized pricing strategies.
Eight companies from various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—have received inquiries from the FTC. The agency seeks to understand the implications of these pricing methods on privacy, competition, and consumer protection.
These businesses utilize data-driven techniques referred to as “surveillance pricing” or “dynamic pricing,” which allows them to display varied prices for the same products according to the shopper’s characteristics or behavior. Factors influencing pricing can include location, demographics, credit history, and browsing or shopping history.
Most of the firms approached by the FTC offer transaction, sales, and pricing services to leading businesses in the U.S. and internationally. Task Software supports major hospitality brands such as McDonald’s and Starbucks. Revionics specializes in retail price optimization solutions for global retailers, including Home Depot. Pros, recognized for its AI-driven pricing solutions, counts Nestlé, HP, and United Airlines among its clients, and collaborates with Microsoft on technology developments.
The FTC aims to clarify the intricacies of this “opaque market” that classifies consumers and establishes targeted pricing mechanisms.
“Companies that collect personal data from Americans can jeopardize individual privacy. There is a concern that these companies may exploit extensive personal information to charge higher prices,” said FTC Chair Lina Khan. “Americans deserve transparency regarding whether businesses utilize consumer data for surveillance pricing, and this inquiry will illuminate the hidden dynamics involving pricing intermediaries.”
The FTC is focusing on four critical areas: the various surveillance pricing products and services provided by each company; their data collection methods; customer and sales information; and how these surveillance pricing practices affect the final prices consumers pay.