The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
On Tuesday, the FTC issued orders to eight companies in various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, demanding information on how these pricing practices affect consumer privacy, competition, and protection.
These companies utilize data-driven tools and techniques, commonly referred to as “surveillance pricing” or “dynamic pricing,” which allow them to present varying prices for the same products based on consumer attributes such as location, demographics, credit history, and online activity.
Many of the firms being investigated offer transaction and pricing services to some of the largest businesses both in the U.S. and globally. Task Software is known for managing transactions for prominent hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization software and analytics for major chains, including Home Depot. Pros, which markets itself as an AI-driven pricing solutions provider, serves clients like Nestlé, HP, and United Airlines and is also affiliated with Microsoft in technology development.
The FTC aims to clarify this “opaque market” that enables companies to categorize consumers and implement targeted pricing strategies. FTC Chair Lina Khan emphasized the potential risks to consumer privacy arising from the misuse of personal data, stating, “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 particularly interested in four areas: the types of products and services related to surveillance pricing that each company offers; their data collection methods; customer and sales information; and the impact of these practices on the prices consumers ultimately pay.