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 firms under scrutiny include Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, which were issued orders by the FTC seeking insights into how such pricing tactics affect privacy, competition, and consumer protection.
These companies utilize data-driven tools, known as “surveillance pricing” or “dynamic pricing,” to present varied prices to consumers for identical products based on individual characteristics or behaviors such as location, demographics, credit history, and browsing habits.
Many of the contacted companies are known for providing transaction, sales, and pricing services to major businesses both in the U.S. and around the globe. For example, Task is the transaction management provider for significant hospitality brands like McDonald’s and Starbucks. Revionics specializes in retail price optimization software and serves well-known chains such as Home Depot. Pros, which offers AI-driven pricing solutions, counts major corporations like Nestlé, HP, and United Airlines among its clientele and collaborates with Microsoft on technology development.
The FTC aims to clarify the complexities of the “opaque market” wherein shoppers are categorized and targeted with specific pricing for products and services.
“Companies that collect Americans’ personal data could jeopardize their privacy. Now, these companies may be using this extensive personal information to impose higher prices,” remarked FTC Chair Lina Khan. “Americans have a right to know whether their detailed consumer data is being utilized for surveillance pricing, and this inquiry will illuminate the obscure landscape of pricing intermediaries.”
The FTC seeks information in four critical areas: the types of surveillance pricing products and services offered by each company; methods of data collection; customer and sales information; and the impact of these surveillance practices on the prices consumers ultimately pay.