The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to personalize pricing.
On Tuesday, the FTC issued information requests to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency aims to understand how these pricing strategies affect privacy, competition, and consumer protection.
Companies often utilize data tools, particularly AI, in a practice referred to as “surveillance pricing” or “dynamic pricing.” This approach allows businesses to present varying prices to different consumers for the same products based on factors such as location, demographics, credit history, and previous browsing or shopping behavior.
Many of the involved companies offer transaction, sales, and pricing services to some of the largest firms in the U.S. and around the world. For instance, Task manages transactions for major hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization software for chains like Home Depot, while Pros promotes AI-driven pricing solutions, serving clients such as Nestlé, HP, and United Airlines. Additionally, Pros collaborates with Microsoft on technology development.
The FTC aims to clarify this “opaque market,” where consumer categorization and targeted pricing can lead to higher costs for some shoppers. FTC Chair Lina Khan expressed concern, 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 commission is seeking insights on four main areas: the types of surveillance pricing services offered, data collection methods, customer and sales information, and the impact of these practices on the prices customers ultimately pay.