FTC Investigates Surveillance Pricing Practices Among Major Companies

The Federal Trade Commission (FTC) has initiated an inquiry into the practices of eight companies that utilize personal data to implement "surveillance pricing," which involves setting prices based on individual shopper characteristics. Announced on Tuesday, the FTC aims to clarify the complexities of this market, where consumer data—such as credit information, location, and browsing history—can lead to different prices for the same products among various customers. The agency's investigation is part of a broader effort to understand how these practices may compromise consumer privacy. FTC Chair Lina M. Khan emphasized the potential risks associated with the collection of personal data, stating that companies could exploit this information to charge higher prices. The inquiry is expected to illuminate the "shadowy ecosystem" of pricing intermediaries that leverage advanced algorithms and artificial intelligence. The companies under scrutiny include Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co. The FTC's orders request detailed information on the types of surveillance pricing each company has developed or licensed, as well as their data collection methods and the demographics of customers targeted by these pricing strategies. Revionics, one of the companies involved, has publicly stated that it does not engage in practices that recommend pricing for specific individuals, asserting that its software relies on market-level data. While Mastercard confirmed receipt of the FTC's request and expressed willingness to cooperate, other companies have yet to provide further comments on the investigation. The outcome of this inquiry could have significant implications for consumer protection and privacy standards in the marketplace.