The Federal Trade Commission (FTC) has initiated an investigation into several major companies to examine their use of customer data, algorithms, and artificial intelligence to personalize pricing.
The FTC sent orders to eight companies across various industries — Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros — to gather information on how these pricing practices affect privacy, competition, and consumer protection.
Employing data tools such as AI, these firms engage in “surveillance pricing” or “dynamic pricing,” which involves setting different prices for the same products based on consumer characteristics or behaviors, including location, demographics, credit history, and browsing or shopping history.
Many of the contacted companies provide transaction, sales, and pricing services to prominent U.S. and global firms. For instance, Task Software manages transactions for major hospitality brands like McDonald’s and Starbucks, while Revionics offers retail price optimization to chains such as Home Depot. Pros, known for its AI-powered pricing solutions, serves clients including Nestlé, HP, and United Airlines, and collaborates with Microsoft on technology development.
The FTC aims to uncover the workings of this “opaque market” that targets consumers with personalized pricing for goods and services.
“Firms that collect Americans’ personal data can jeopardize privacy. These companies might exploit this data trove to impose higher prices on consumers,” remarked FTC Chair Lina Khan. “Americans have the right to know if businesses are using their detailed consumer data for surveillance pricing. The FTC’s investigation will illuminate this shadowy ecosystem of pricing intermediaries.”
The FTC seeks information in four key areas: the types of surveillance pricing products and services offered; data collection methods; customer and sales details; and the impact of these surveillance practices on the prices customers pay.