The Federal Trade Commission (FTC) has taken action by ordering information from eight companies involved in the practice of surveillance pricing. The FTC aims to gain a better understanding of this “opaque market” where personal data is used to set prices based on individual characteristics. These companies allegedly utilize advanced algorithms, artificial intelligence, and other technologies to charge different customers varying prices for the same goods, using data such as credit information, location, and browsing history.
FTC Chair Lina M. Khan expressed concerns about the potential privacy risks associated with firms that harvest personal data, stating that these companies may exploit this vast trove of information to charge higher prices. The FTC’s inquiry seeks to shed light on this shadowy ecosystem of pricing middlemen.
The FTC has sent orders to Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co. The agency’s study aims to understand the mechanics of surveillance pricing and investigate its potential impacts on privacy and consumer protection. The orders requested information on the types of surveillance pricing each company has developed or licensed, data collection methods, customers offered such products or services, and other potential impacts, such as different prices paid.
Revionics, one of the companies under scrutiny, denied developing software that recommends pricing targeted to specific individuals or using individual consumer data in any manner. The company stated that its AI price optimization software considers market-level factors, such as historical sales data, to recommend optimal prices. Revionics emphasized that it does not engage in operations related to consumer surveillance.
Mastercard confirmed receiving the FTC’s request and expressed its willingness to cooperate in the process. The remaining companies did not immediately provide additional statements.