The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies concerning their use of customer data, algorithms, and artificial intelligence to personalize pricing.
The firms under scrutiny include Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC issued orders for information related to the implications of such pricing strategies on privacy, competition, and consumer protection.
These companies employ data tools, referred to as “surveillance pricing” or “dynamic pricing,” allowing them to present different prices to consumers based on various factors, including demographics, location, credit history, and shopping behavior.
Many of the firms investigated are responsible for transaction, sales, and pricing services for some of the largest businesses in the U.S. and internationally. Task Software manages transactions for several major hospitality chains, like McDonald’s and Starbucks, while Revionics provides retail price optimization solutions for companies including Home Depot. Pros offers AI-driven pricing solutions and has clients such as Nestlé, HP, and United Airlines; it is also a technology partner of Microsoft.
The FTC aims to understand this “opaque market” that categorizes consumers and establishes targeted pricing for products and services. FTC Chair Lina Khan emphasized the risks to consumer privacy, stating that businesses could exploit personal data to charge higher prices. She noted, “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 seeking information on four main aspects: the types of surveillance pricing services offered, data collection methods, customer and sales insights, and the influence of surveillance practices on pricing for consumers.