The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received information requests from the agency aimed at understanding how these pricing practices affect privacy, competition, and consumer protection.
These companies utilize data-driven methods, often referred to as “surveillance pricing” or “dynamic pricing,” to display varying prices for the same products to different consumers based on factors such as location, demographics, credit history, and shopping behavior.
Many of the firms involved provide transaction and pricing services to significant businesses both in the U.S. and globally. For instance, Task Software is known for its role in transaction management for major hospitality brands like McDonald’s and Starbucks. Revionics offers retail price optimization software and pricing analytics to numerous global retail chains, such as Home Depot. Pros markets itself as a provider of AI-driven pricing solutions, with clients including Nestlé, HP, and United Airlines, and also partners with Microsoft for technology development.
The FTC aims to uncover details about this “opaque market” characterized by customer classification and targeted pricing strategies.
FTC Chair Lina Khan commented on the investigation, stating, “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 commission seeks information in four primary areas: the surveillance pricing products and services offered by each company; their data collection methods; customer and sales data; and how these practices influence the prices that customers eventually pay.