The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their usage of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
The inquiry, launched on Tuesday, includes eight firms from various sectors: Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. The FTC is seeking information on how these companies’ pricing strategies affect privacy, competition, and consumer protection.
These firms utilize data-driven tools, commonly referred to as “surveillance pricing” or “dynamic pricing,” to present different prices for identical products based on individual customer traits and behaviors such as location, demographics, credit history, and online shopping history.
Many of the companies under scrutiny provide essential transaction, sales, and pricing services to major corporations both in the U.S. and internationally. For instance, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics focuses on retail price optimization for companies such as Home Depot. Pros, known for its AI-based pricing solutions, serves clients that include Nestlé, HP, and United Airlines, and collaborates with Microsoft for technology development.
The FTC aims to clarify this “opaque market” that categorizes consumers and establishes targeted pricing schemes for products and services.
“Companies that gather personal data from Americans can jeopardize their privacy. These firms may also be taking advantage of this extensive personal information to impose higher prices,” stated FTC Chair Lina Khan. “Consumers have a right to know whether their detailed information is being used for surveillance pricing, and this inquiry will illuminate the murky landscape of pricing intermediaries.”
The FTC is focusing its investigation on four main aspects: the types of surveillance pricing products and services offered by each company, the methods of data collection, sales and customer information, and how these surveillance practices affect the prices consumers ultimately pay.