The Federal Trade Commission (FTC) has initiated an inquiry into several major companies regarding their practices involving customer data, algorithms, and artificial intelligence used for personalized pricing strategies.
In a recent move, the FTC issued information requests to eight companies: Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency aims to assess how these practices affect consumer privacy, competition, and protection.
These companies utilize data-driven tools, referred to as “surveillance pricing” or “dynamic pricing,” which enable them to present different prices for identical products based on consumer-specific factors such as location, demographics, credit history, and shopping behavior.
Many of the firms in question play significant roles in the transaction, sales, and pricing sectors for some of the largest corporations in the United States and around the world. Task Software manages transactions for major hospitality brands, including McDonald’s and Starbucks. Revionics offers retail price optimization software to various global firms, including Home Depot. Pros, which markets itself as a provider of AI-driven pricing solutions, serves notable clients such as Nestlé, HP, and United Airlines, while also being a technology partner for Microsoft.
The FTC is intent on understanding this “opaque market” that categorizes consumers and sets specific prices for goods and services.
“Companies that collect Americans’ personal data may pose a threat to privacy. These firms could be using extensive personal information to impose higher prices,” stated FTC Chair Lina Khan. “Americans have a right to know if businesses are leveraging detailed consumer data to implement surveillance pricing, and the FTC’s investigation aims to illuminate this complex network of pricing intermediaries.”
The agency is particularly focused on four main areas: the types of surveillance pricing services offered by each company, their data collection methods, customer and sales data, and the influence of these practices on the prices consumers ultimately pay.