The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence in setting individualized pricing.
This inquiry involves eight firms from various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC issued orders to these companies on Tuesday, seeking information about how such pricing practices affect privacy, competition, and consumer protection.
Companies often utilize data tools and employ a method referred to as “surveillance pricing,” also known as “dynamic pricing.” This practice allows businesses to display varying prices for the same products based on consumer characteristics and behaviors such as location, demographics, credit history, and previous browsing or shopping activity.
Many of the entities named in the investigation supply transaction, sales, and pricing services to prominent firms both in the U.S. and worldwide. Task, for instance, handles transaction management for major hospitality brands like McDonald’s and Starbucks, while Revionics offers pricing optimization software to global retailers, including Home Depot. Pros, recognized for delivering AI-powered pricing solutions, operates with notable clients such as Nestlé, HP, and United Airlines and partners with Microsoft for technology development.
The FTC aims to explore the “opaque market” that profiles consumers and sets targeted prices for products and services. FTC Chair Lina Khan emphasized the risks posed to consumer privacy, stating, “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.” She added, “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 focusing on four main areas: the types of surveillance pricing products and services offered by each company; their data collection methods; customer and sales information; and the impact of these practices on the prices consumers ultimately pay.