The Federal Trade Commission (FTC) has initiated an investigation into several major companies regarding their utilization of customer data, algorithms, and artificial intelligence to create personalized pricing strategies.
The investigation focuses on eight companies across various sectors: Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros. These firms have received requests for information from the FTC concerning how their pricing methods may affect privacy, competition, and consumer protection.
Many of these companies are key players in providing transaction, sales, and pricing solutions to large businesses both in the U.S. and internationally. Task Software manages transactions for significant hospitality brands, including McDonald’s and Starbucks. Revionics specializes in retail price optimization software and analytics for global chains like Home Depot, while Pros offers AI-driven pricing solutions and counts major corporations such as Nestlé, HP, and United Airlines among its clientele. Pros also partners with Microsoft in technology development.
The FTC aims to investigate what it describes as an “opaque market” that classifies consumers and applies targeted pricing to products and services.
FTC Chair Lina Khan stated, “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 FTC is seeking details on four specific areas: the types of surveillance pricing products and services offered by each company; data collection methods; customer and sales information; and the effects of surveillance practices on customer pricing.