The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data, algorithms, and artificial intelligence to set individualized prices.
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The FTC has served information requests to eight companies across various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The agency is examining how these pricing practices affect privacy, competition, and consumer protection.
These companies utilize data tools, including AI, to implement what is known as “surveillance pricing” or “dynamic pricing.” This approach allows them to display different prices for the same products based on factors such as location, demographics, credit history, and shopping behaviors.
Many of the firms under scrutiny provide transaction, sales, and pricing services to significant businesses in the U.S. and worldwide. Notably, Task Software is associated with major hospitality firms, including McDonald’s and Starbucks. Revionics supplies retail pricing optimization tools and analytics to large retailers like Home Depot. Pros, which offers AI-driven pricing solutions, serves clients such as Nestlé, HP, and United Airlines and partners with Microsoft for technology development.
The FTC aims to clarify what it describes as an “opaque market” that categorizes consumers and assigns targeted pricing for products and services.
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 concerning four primary areas: the types of surveillance pricing products and services offered by each company, data collection methods, customer and sales information, and the influence of these practices on the prices customers ultimately pay.