The Federal Trade Commission (FTC) has initiated an investigation into several prominent companies regarding their practices related to customer data, algorithms, and artificial intelligence in pricing strategies.
The regulatory body has issued orders to eight firms, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, seeking insights into how these pricing tactics affect privacy, competition, and consumer protection.
These companies employ data-driven tools, often referred to as “surveillance pricing” or “dynamic pricing,” which adjust the prices customers see based on their specific attributes or behaviors, such as location, demographics, credit history, and shopping habits.
Many of the contacted firms are major providers of transaction, sales, and pricing solutions for some of the largest businesses in the U.S. and around the globe. Notably, Task Software manages transactions for significant hospitality providers like McDonald’s and Starbucks, while Revionics supplies retail price optimization tools to chains such as Home Depot. Pros, which offers AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines, and is a technology partner of Microsoft.
The FTC aims to clarify the workings of this “opaque market,” which involves categorizing consumers and setting targeted prices for goods and services.
“Companies that collect personal data can jeopardize individuals’ privacy. Now these entities may be utilizing this extensive collection of personal information to impose higher prices,” stated FTC Chair Lina Khan. “Consumers deserve transparency regarding whether businesses are using detailed consumer data for surveillance pricing, and our investigation will illuminate this obscure network of pricing intermediaries.”
The FTC’s inquiry will focus on four major areas: the types of surveillance pricing products and services offered by each company, their data collection methods, customer and sales data, and the impact of these practices on the final prices consumers pay.