The Federal Trade Commission (FTC) has initiated an investigation targeting several prominent companies regarding their use of customer data, algorithms, and artificial intelligence for personalized pricing strategies.
Eight companies, including Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros, received formal requests from the FTC seeking information about how these practices affect privacy, competition, and consumer protection.
These companies are engaged in what is often referred to as “surveillance pricing” or “dynamic pricing,” which involves displaying varying prices to consumers for the same products based on individual characteristics or behaviors, such as location, demographics, credit history, and online shopping patterns.
Many of the firms under scrutiny provide transaction, sales, and pricing solutions to significant businesses both in the U.S. and internationally. Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks. Revionics offers retail price optimization and analytics services to global retailers, including Home Depot. Pros, a software company emphasizing AI-driven pricing solutions, serves clients like Nestlé, HP, and United Airlines and collaborates with Microsoft for technology development.
The FTC aims to investigate this “opaque market” that allows companies to categorize consumers and establish targeted prices.
“Companies that collect sensitive personal information risk infringing on individuals’ privacy. Additionally, they may be using this extensive data to impose higher charges,” stated FTC Chair Lina Khan. “Americans should understand whether their detailed consumer data is being utilized to enforce surveillance pricing, and this inquiry will illuminate the unclear realm of pricing intermediaries.”
The regulatory body is particularly interested in four areas: the types of surveillance pricing products offered by each company; methods of data collection; customer and sales information; and the effect of these practices on the pricing that consumers ultimately face.