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.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have received information requests from the regulatory agency. The FTC is seeking insights into how these pricing practices may affect privacy, competition, and consumer protection.
Companies utilize data tools such as AI to implement “surveillance pricing” or “dynamic pricing,” a method where different prices are shown to consumers based on their individual attributes or behaviors. Factors influencing pricing can include geography, demographics, credit history, and online shopping patterns.
Many firms contacted by the FTC offer transaction, sales, and pricing services to some of the largest businesses in the United States and globally. Task Software assists major hospitality firms like McDonald’s and Starbucks, while Revionics provides retail pricing optimization software for global chains, including Home Depot. Pros, known for its AI-driven pricing solutions, has prominent clients such as Nestlé, HP, and United Airlines, and is a tech partner of Microsoft.
The FTC aims to clarify the “opaque market” that identifies consumers and applies targeted pricing strategies. FTC Chair Lina Khan stated, “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 FTC is seeking information on four critical areas: the types of surveillance pricing offerings by each company, data collection methods, details on customer and sales data, and how these surveillance practices influence consumer pricing.