The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing strategies. Eight companies—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—have received requests for information from the FTC concerning the implications of these pricing tactics on privacy, competition, and consumer protection.
These companies utilize data-driven methods, including artificial intelligence, in a practice referred to as “surveillance pricing” or “dynamic pricing,” which allows them to present varying prices for the same products based on individual consumer characteristics and behaviors. Factors such as location, demographics, credit history, and shopping habits can influence pricing.
Among the contacted firms, Task Software manages transactions for major hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization software for numerous global retailers, such as Home Depot. Pros, known for its AI-powered solutions in pricing, has clients like Nestlé, HP, and United Airlines, and also collaborates with Microsoft.
The FTC aims to investigate this “opaque market” that categorizes consumers and assigns targeted prices for goods and services. FTC Chair Lina Khan emphasized that companies using customers’ personal data might endanger their privacy and could exploit this information to charge higher prices. 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 specifically seeking information in four areas: the types of surveillance pricing products and services each company offers, their methods of data collection, relevant customer and sales information, and how these surveillance practices affect the prices customers ultimately pay.