The Federal Trade Commission has opened a probe into “surveillance pricing,” a practice where companies use artificial intelligence to adjust prices based on detailed customer data.
The FTC is concerned this method allows firms to charge varying prices to different customers by leveraging their behavior and characteristics.
The agency has issued mandatory information requests to eight companies known for integrating AI with customer data to tailor pricing.
The firms under scrutiny include Mastercard, JPMorgan Chase, Accenture, McKinsey, and several others, such as Task, Revionics, Bloomreach, and Pros.
These companies use advanced technology and data analytics to influence pricing strategies.
FTC Chair Lina Khan said: “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.”
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She described surveillance pricing as part of a “shadowy ecosystem” involving various pricing intermediaries.
The FTC’s investigation, conducted under its 6(b) authority, aims to gather information on the products and services offered by these companies, their data collection methods, client details, and the impact on consumer pricing.
Mastercard has pledged cooperation with the FTC.
Revionics has clarified that it does not use its software for individual-targeted pricing or consumer surveillance.
Revionics expects the investigation to affirm the benefits of its AI-driven price optimization software.
