The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their utilization of customer data, algorithms, and artificial intelligence to customize pricing strategies. This inquiry includes eight firms: Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies received requests from the FTC for information concerning the effects of these pricing methods on privacy, competition, and consumer protection.
Businesses are leveraging data tools, particularly artificial intelligence, to engage in a practice known as “surveillance pricing” or “dynamic pricing.” This allows companies to present varying prices for the same products based on individual consumer traits or behaviors, such as location, demographics, credit history, and online shopping habits.
Notably, many of the firms contacted by the FTC supply transaction, sales, and pricing services to prominent enterprises both in the United States and around the world. Among them, Task Software is a pivotal transaction management company for major hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization software for numerous global chains, like Home Depot. Pros, which markets itself as an AI-driven pricing solution provider, serves clients such as Nestlé, HP, and United Airlines and collaborates with Microsoft on technology development.
The FTC aims to investigate the intricate “opaque market” that categorizes consumers and assigns targeted prices for products and services. FTC Chair Lina Khan highlighted concerns about privacy and potential exploitation of personal data, noting that the public deserves transparency regarding whether businesses are using detailed consumer information for surveillance pricing. The agency’s inquiry will aim to clarify the obscure operations of pricing intermediaries.
The FTC is particularly focused on gathering information in four main areas: the specific surveillance pricing products and services offered by each company, data collection methods, customer and sales data, and the effects of these surveillance practices on the final prices consumers pay.