The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies concerning their use of customer data, algorithms, and artificial intelligence to customize pricing for consumers.
The investigation targets eight firms from various sectors, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These companies have been requested to provide information regarding the implications of their pricing practices on consumer privacy, competition, and protection.
These firms utilize data-driven techniques, referred to as “surveillance pricing” or “dynamic pricing,” which enable them to present different prices to consumers based on factors such as location, demographics, credit history, and online behavior.
Many of the companies involved supply transaction, sales, and pricing services to some of the largest businesses in the U.S. and worldwide. For example, Task Software manages transactions for major hospitality chains, including McDonald’s and Starbucks. Revionics offers retail pricing optimization tools and analytics to global retailers such as Home Depot. Pros, known for its AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines, and collaborates with Microsoft for technology development.
The FTC’s aim is to investigate this “opaque market,” which classifies consumers and applies targeted pricing strategies.
FTC Chair Lina Khan emphasized the potential privacy risks associated with the exploitation of personal data, stating, “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 insights in four primary areas: the types of surveillance pricing products and services offered by each company, their data collection methods, sales and customer information, and the impact of these surveillance practices on the prices charged to consumers.