The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing strategies.
The companies under scrutiny include Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, all of which received information requests from the FTC. The agency seeks to understand how these pricing practices affect consumer privacy, market competition, and consumer protection.
These companies employ data-driven techniques, referred to as “surveillance pricing” or “dynamic pricing,” which allow them to present varying prices for identical products based on factors like consumer behavior, demographics, credit history, and location.
Many of the firms targeted by the FTC assist major retailers in the U.S. and internationally. For example, Task Software handles transaction management for brands like McDonald’s and Starbucks, while Revionics offers pricing analytics to large retailers, including Home Depot. Pros, known for its AI-powered pricing solutions, has clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to clarify this “opaque market” that profiles shoppers and determines pricing. “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,” stated FTC Chair Lina Khan. She emphasized that Americans should know if businesses are employing detailed consumer data for surveillance pricing, and noted that the inquiry aims to illuminate this complex pricing ecosystem.
The FTC is particularly interested in four areas: the types of surveillance pricing products and services each company provides, the methods of data collection, sales and customer information, and the influence of these practices on consumer pricing.