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 for individual consumers.
On Tuesday, the FTC issued orders to eight firms — Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros — seeking information about how these pricing strategies affect privacy, competition, and consumer protection.
These companies utilize data tools, including AI, in a practice referred to as “surveillance pricing” or “dynamic pricing,” which allows them to present varying prices to consumers for the same products based on individual characteristics and behaviors such as location, demographics, credit history, and shopping habits.
Many of the companies under scrutiny provide transaction, sales, and pricing services to some of the largest businesses both in the U.S. and internationally. Task Software manages transactions for major hospitality entities such as McDonald’s and Starbucks, while Revionics delivers retail price optimization software to prominent chains like Home Depot. Pros, known for its AI-driven pricing solutions, counts Nestlé, HP, and United Airlines among its clients and serves as a technology partner for Microsoft.
The FTC aims to investigate this “opaque market,” which enables the categorization of shoppers and the assignment of targeted prices for products and services.
“Companies that collect personal data from Americans may jeopardize people’s privacy. They could be using this extensive personal information to impose higher prices,” stated FTC Chair Lina Khan. “Consumers have the right to understand whether businesses are using in-depth consumer data for surveillance pricing, and the FTC’s investigation will provide insights into this concealed ecosystem of pricing intermediaries.”
The FTC is seeking details on four main areas: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales data, and how these surveillance tactics impact the prices consumers ultimately pay.