The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their practices involving customer data, algorithms, and artificial intelligence used for personalized pricing strategies.
Eight companies from various sectors — Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros — received inquiries from the FTC this week, seeking details on how these pricing methods affect privacy, market competition, and consumer protections.
These companies utilize data tools for a practice referred to as “surveillance pricing” or “dynamic pricing,” which allows them to present different prices to consumers based on individual characteristics or behaviors. Factors such as geographical location, demographics, credit history, and online shopping activities can influence these pricing variations.
Many of the investigated firms deliver transaction, sales, and pricing solutions to some of the largest companies both in the U.S. and internationally. Task Software manages transactions for major hospitality brands, including McDonald’s and Starbucks. Revionics offers retail pricing optimization and analytics for prominent retailers like Home Depot. Pros, which markets itself as an AI-driven pricing solutions provider, works with major corporations such as Nestlé, HP, and United Airlines and is also a technology partner for Microsoft.
The FTC aims to investigate what it refers to as an “opaque market” that categorizes consumers and applies targeted pricing to products and services.
“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,” stated FTC Chair Lina Khan. “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 specifically seeking information in four major areas: the kinds of surveillance pricing products and services offered by each company, their data collection methods, customer and sales data, and the impact of these practices on the prices consumers ultimately pay.