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. This includes eight firms: Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, which received information requests from the FTC on Tuesday.
These companies utilize tools, including AI, in a practice known as “surveillance pricing,” or “dynamic pricing,” which allows them to display varying prices to different consumers based on characteristics such as location, demographics, credit history, and browsing behavior.
Many of the contacted companies supply transaction, sales, and pricing services to some of the largest firms both in the United States and globally. For instance, Task Software manages transactions for significant hospitality brands like McDonald’s and Starbucks, while Revionics offers pricing analytics to retailers like Home Depot. Pros provides AI-driven pricing solutions and works with clients such as Nestlé, HP, and United Airlines and is also a technology partner with Microsoft.
The FTC aims to investigate what it calls an “opaque market” that categorizes shoppers and assigns targeted prices for products and services. FTC Chair Lina Khan expressed concerns about the risks posed to consumer privacy due to the extensive collection of personal data. She stated, “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 specifically seeking information in four main areas: the types of surveillance pricing products and services offered, data collection methods, customer and sales information, and the impact of these practices on the final prices customers pay.