The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their practices involving customer data, algorithms, and artificial intelligence to personalize pricing strategies.
On Tuesday, the FTC issued orders to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking detailed information on how these pricing practices affect privacy, competition, and consumer protection.
These companies leverage data tools, including AI, to implement a strategy known as “surveillance pricing” or “dynamic pricing,” which allows them to present different prices to consumers based on various factors such as location, demographics, credit history, and past shopping behavior.
Many of the firms under scrutiny supply transaction, sales, and pricing services to leading businesses in the U.S. and around the world. Task Software supports several major hospitality brands like McDonald’s and Starbucks, while Revionics offers retail price optimization tools to chains like Home Depot. Pros, which specializes in AI-driven pricing solutions, serves clients including Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to investigate the “opaque market” environment that characterizes consumer categorization and the setting of targeted prices for products and services.
FT Chair Lina Khan emphasized the risks associated with companies gathering extensive personal data, indicating that they might exploit this information to impose higher prices on consumers. She stated, “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 seeking information in four primary areas: the types of surveillance pricing products and services offered, data collection methods, customer and sales information, and the influence of these practices on consumer pricing.