The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
On Tuesday, the FTC sent information requests to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency is seeking insights into how these practices affect privacy, competition, and consumer protection.
Companies are utilizing tools like AI to implement a strategy known as “surveillance pricing,” also referred to as “dynamic pricing.” This approach allows businesses to offer varying prices for identical products based on factors such as geographic location, demographics, credit history, and online shopping behavior.
Many of the companies under investigation are significant providers of transaction, sales, and pricing services for major U.S. and global firms. For example, Task Software manages transactions for hospitality giants like McDonald’s and Starbucks, while Revionics supplies retail price optimization and analytics to brands such as Home Depot. Additionally, Pros, a company specializing in AI solutions for pricing, services clients like Nestlé, HP, and United Airlines and partners with Microsoft.
The FTC aims to clarify the complexities of what it describes as an “opaque market,” where consumer categorization leads to targeted pricing.
FTC Chair Lina Khan stated, “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 is particularly interested in four main aspects: the types of surveillance pricing products and services offered by the companies, data collection methods, customer and sales information, and the influence of these practices on pricing outcomes for consumers.