The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their practices related to customer data, algorithms, and artificial intelligence used for personalized pricing strategies.
Eight firms spanning different sectors—Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros—were issued orders by the FTC to provide information about how these pricing techniques affect privacy, competition, and consumer protection.
These companies utilize data tools, such as AI, to implement a pricing method referred to as “surveillance pricing,” or “dynamic pricing,” which allows them to present varying prices for identical products to different consumers based on attributes like location, demographics, credit history, and online browsing or shopping habits.
Notably, many of the firms contacted by the FTC deliver transaction, sales, and pricing solutions to major corporations both in the U.S. and internationally. Task Software serves as the transaction management provider for several large hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization software and analytics for chains like Home Depot. Pros, which claims to offer AI-driven pricing solutions, has clients such as Nestlé, HP, and United Airlines, and partners with Microsoft in technology development.
The FTC aims to clarify the operations of this “opaque market” where consumer profiling leads to tailored pricing for products and services.
FTC Chair Lina Khan commented on the investigation, 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. 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 FTC is seeking information in four primary areas: the types of surveillance pricing products and services offered by each company, methods of data collection, customer and sales data, and the impact of these pricing practices on the prices consumers pay.