The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing for consumers.
Eight companies across various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—have been ordered to provide information that will help the agency understand the effects of these pricing practices on privacy, competition, and consumer protection.
These companies utilize data-driven strategies, such as “surveillance pricing” or “dynamic pricing,” which allow them to present different prices to consumers based on individual characteristics or behaviors, including location, demographics, credit history, and shopping patterns.
Many of the firms being investigated offer transaction, sales, and pricing services to some of the largest corporations in the United States and worldwide. Task Software manages transactions for several hospitality giants, including McDonald’s and Starbucks, while Revionics delivers retail price optimization and analytics services to chains like Home Depot. Pros, which specializes in AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft as a technology partner.
The FTC aims to uncover the complexities of the “opaque market” that categorizes consumers and sets targeted prices for goods and services. According to FTC Chair Lina Khan, “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’s investigation will focus on four main areas: the surveillance pricing products and services available from each company, the methods of data collection, customer and sales information, and how these surveillance practices affect the prices consumers ultimately pay.