The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies concerning their practices surrounding customer data, algorithms, and artificial intelligence in relation to personalized pricing strategies.
The agency has issued information requests to eight companies: Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The focus of the inquiry is to understand how these pricing practices affect privacy, competition, and consumer protection.
These companies use data-driven tools and techniques, notably “surveillance pricing” or “dynamic pricing,” to present varying prices for identical products based on specific consumer characteristics and behaviors, including location, demographics, credit history, and previous shopping patterns.
Many of the firms targeted by the FTC offer services associated with transactions, sales, and pricing to major U.S. and global businesses. Task Software supports transaction management for well-known hospitality chains like McDonald’s and Starbucks. Revionics provides retail pricing optimization tools for major retailers, including Home Depot. Meanwhile, Pros, which specializes in AI-driven pricing solutions, lists clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to clarify the currently “opaque market” that allows companies to categorize consumers and set specific prices for goods and services.
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 FTC’s request for information includes four main areas: the types of surveillance pricing products and services provided; methods of data collection; customer and sales data; and the impact of these surveillance pricing practices on the prices consumers ultimately pay.