The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their practices related to customer data usage, algorithms, and artificial intelligence for personalized pricing strategies.
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Eight companies spanning various sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—received inquiries from the FTC on Tuesday. The agency seeks to understand the implications of these pricing strategies for consumer privacy, competition, and protection.
Businesses are employing data analytics tools, such as AI, to implement a practice known as “surveillance pricing” or “dynamic pricing,” where consumers may see different prices for identical products based on various factors, including location, demographics, credit history, and online behavior.
Several of the firms under investigation provide sales, transaction, and pricing services to major corporations in the U.S. and worldwide. Task Software is responsible for transaction management for notable hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail pricing optimization and analytics for global chains, including Home Depot. Pros, known for its AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines and partners with Microsoft for technology development.
The FTC aims to clarify this complex market that categorizes consumers and utilizes targeted pricing models.
“Businesses that gather Americans’ personal data can compromise individual privacy. These companies could be taking advantage of this extensive data to impose higher prices,” stated FTC Chair Lina Khan. “Americans have the right to understand whether their detailed consumer data is being used for surveillance pricing, and our investigation will uncover this opaque ecosystem of pricing intermediaries.”
The FTC is seeking details in four main areas: the types of surveillance pricing products and services offered, data collection methods, customer and sales information, and the impact of these practices on the final prices customers pay.