The Federal Trade Commission (FTC) has initiated an investigation into several leading companies regarding their use of customer data, algorithms, and artificial intelligence to tailor pricing for individual consumers.
The inquiry involves eight firms from various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These firms received requests from the FTC for information about the effects of their pricing practices on privacy, competition, and consumer protection.
Companies are utilizing data tools, including AI, in a practice referred to as “surveillance pricing” or “dynamic pricing.” This method allows businesses to present different prices to consumers for the same products depending on factors such as location, demographics, credit history, and online shopping behavior.
Several of the companies under investigation provide transaction, sales, and pricing services to major U.S. and global businesses. Task Software, for instance, manages transactions for well-known hospitality brands like McDonald’s and Starbucks. Revionics supplies retail price optimization software and pricing analytics to large international retailers, including Home Depot. Pros, which offers AI-based pricing solutions, serves clients like Nestlé, HP, and United Airlines and partners with Microsoft for technology development.
The FTC aims to clarify the “opaque market” that categorizes consumers and determines targeted prices for products and services. “Firms that harvest Americans’ personal data can put people’s privacy at risk,” said 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 FTC is seeking information in four main areas: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales data, and how these pricing practices affect the prices consumers ultimately pay.