The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their use of customer data and artificial intelligence for personalized pricing strategies.
On Tuesday, the FTC issued orders to eight firms from various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking insights into how these practices affect privacy, competition, and consumer protection.
These companies employ techniques often referred to as “surveillance pricing” or “dynamic pricing,” where different prices are presented to consumers for identical products based on factors such as location, demographics, credit history, and online behavior.
Many of the firms under investigation offer transaction and pricing services to leading businesses both in the U.S. and internationally. Task Software, for instance, manages transactions for major hospitality chains like McDonald’s and Starbucks, while Revionics specializes in retail price optimization for global brands like Home Depot. Pros, which claims to provide AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to clarify the complexities within this “opaque market” that segments shoppers and assigns targeted prices. FTC Chair Lina Khan emphasized the risk to consumer privacy posed by companies utilizing personal data to potentially impose higher prices. She stated that Americans have the right to understand if their detailed consumer data is being used for such pricing strategies, and the inquiry intends to illuminate this ambiguous network of pricing intermediaries.
The agency is particularly interested in four areas: the nature of the surveillance pricing products offered, data collection methods, customer and sales data, and the effect of these practices on pricing for consumers.