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. Eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received information requests from the agency aimed at understanding the implications of these practices on privacy, competition, and consumer protection.
These companies utilize data-driven tools, often referred to as “surveillance pricing” or “dynamic pricing,” to display varying prices to consumers based on specific characteristics or behaviors. Factors influencing pricing may include location, demographics, credit history, and online shopping habits.
The companies under investigation are significant providers of transaction, sales, and pricing services both in the U.S. and internationally. For instance, Task Software manages transaction services for well-known hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization software and analytics for large retailers, including Home Depot. Pros, which offers AI-powered pricing solutions, counts major corporations such as Nestlé, HP, and United Airlines as clients, and collaborates with Microsoft on technology development.
The FTC is aiming to clarify the “opaque market” that utilizes comprehensive shopper profiles to set targeted prices for various products and services.
FTC Chair Lina Khan remarked, “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 agency seeks insights on four main areas: the types of surveillance pricing products and services provided by each company; data collection methods; customer and sales data; and the influence of these surveillance practices on the prices customers ultimately pay.