The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The inquiry has targeted eight firms across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies have been ordered to provide information on how their pricing practices may affect privacy, competition, and consumer protection.
These businesses utilize data-driven tools such as AI to implement “surveillance pricing,” or “dynamic pricing,” which allows them to show different prices to consumers based on factors like location, demographics, credit history, and shopping behavior.
Many of the firms contacted by the FTC deliver transaction, sales, and pricing services to some of the largest companies both in the U.S. and worldwide. Task, for example, manages transactions for major hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization software and serves numerous global retailers, including Home Depot. Meanwhile, Pros, which claims to offer AI-driven pricing solutions, lists brands like Nestlé, HP, and United Airlines among its clients. Pros also collaborates with Microsoft on technology development.
The FTC aims to explore this “opaque market” characterized by the profiling of consumers and the establishment of targeted pricing.
“Companies that gather personal data from Americans could jeopardize people’s privacy. They might be taking advantage of this extensive collection of personal information to impose higher prices,” said FTC Chair Lina Khan in a statement. “Americans have the right to know if businesses are using detailed consumer data for surveillance pricing, and the FTC’s investigation will provide clarity on this obscure pricing system.”
The FTC is seeking insights in four critical areas: the types of surveillance pricing products and services offered by each company, methods of data collection, information about customers and sales, and the impact of these practices on the prices customers ultimately pay.