The Federal Trade Commission (FTC) has initiated an investigation into several major corporations regarding their use of customer data, algorithms, and artificial intelligence to customize pricing for individual consumers.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, have received formal requests from the FTC for information on how these pricing strategies affect privacy, competition, and consumer protection.
These companies utilize data-driven techniques, often referred to as “surveillance pricing” or “dynamic pricing,” which allows them to present varying prices to consumers based on specific attributes such as location, demographics, credit history, and online behavior.
Many of the firms under scrutiny provide transaction and pricing services to some of the largest companies in the U.S. and worldwide. Task Software manages transactions for several well-known hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization software for major retailers like Home Depot, while Pros offers AI-powered pricing solutions to clients such as Nestlé, HP, and United Airlines, and collaborates with Microsoft as a technology partner.
The FTC aims to clarify the workings of what it describes as an “opaque market” that categorizes consumers and sets targeted prices based on collected data.
Lina Khan, Chair of the FTC, emphasized the importance of transparency, 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 agency is seeking details on four main areas: the types of surveillance pricing products and services offered by each company, the methods of data collection, customer and sales data, and the impact of these practices on the prices consumers pay.