The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence to customize pricing for individual consumers.
Eight firms have been targeted, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies have received orders for information related to how their pricing practices affect privacy, competition, and consumer protection.
These firms utilize data tools in a practice known as “surveillance pricing,” also referred to as “dynamic pricing,” which allows them to charge different prices to consumers based on various factors like location, demographics, credit history, and online behavior.
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Many of the involved companies offer transaction, sales, and pricing services to major corporations both in the U.S. and internationally. For instance, Task Software is behind transaction management for prominent hospitality brands such as McDonald’s and Starbucks, while Revionics specializes in retail price optimization for major chains like Home Depot. Pros, which provides AI-driven pricing solutions, serves clients including Nestlé, HP, and United Airlines, and is also a technology partner of Microsoft.
The FTC aims to investigate this complex and often unclear market that profiles shoppers and establishes targeted prices. FTC Chair Lina Khan emphasized the risks posed to privacy by companies that collect personal data, suggesting that this information could be misused to set higher prices. Khan stated, “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.”
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The FTC’s inquiry will focus 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 effects of these practices on the prices that consumers ultimately pay.