FTC Probes Data-Driven Pricing Practices

The U.S. Federal Trade Commission is investigating how various companies use consumer data to set targeted prices. Ordered to provide information are Mastercard, JPMorgan Chase, and several IT and consulting firms. The FTC aims to shed light on potentially exploitative pricing practices driven by personal data and AI technology.

The U.S. Federal Trade Commission has initiated a study to investigate products enabling companies to set different prices for consumers based on location, past purchases, and other personal data.

On Tuesday, the agency ordered Mastercard, JPMorgan Chase, and six other companies to disclose information about their targeted pricing products, the data involved, and the impact on pricing strategies. IT services provider Accenture, consultancy McKinsey & Co., and software providers Pros Holdings Inc, Revionics, Bloomreach, and Task Software are also under scrutiny.

These companies offer products that leverage consumer data and artificial intelligence to target prices individually, according to the FTC. Although no wrongdoing is alleged, FTC Chair Lina Khan stated the study aims to illuminate a "shadowy ecosystem of pricing middlemen."

Khan emphasized the risks to privacy and potential exploitation of personal information for higher pricing. Online advertising has historically used data such as browsing history and location to customize ads for consumers.

The FTC expresses concern that similar technology could now set disparate prices or enable collusion among competitors, a practice it dubs "surveillance pricing." Currently, the FTC is also deliberating on rules to safeguard consumer privacy and restrict data collection without consent.

(With inputs from agencies.)