FTC Launches Inquiry into Surveillance-Based Pricing Practices of Major Companies

FTC orders 8 companies to hand over information on 'surveillance pricing' practices

The Federal Trade Commission has ordered information from eight companies that the agency says offer products and services that use personal data to set prices based on a shopper's individual characteristics. In a Tuesday announcement, the FTC said it was seeking to better understand the "opaque market" of "surveillance pricing" practices using consumer data -- including credit information, location and browsing history -- to charge different customers different prices for the same goods. To do this, the agency noted, third-party intermediaries claim to use advanced algorithms, artificial intelligence and other technology. "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," FTC Chair Lina M. Khan said in a prepared statement. Khan added that the FTC's inquiry "will shed light on this shadowy ecosystem of pricing middlemen." The orders requested information on the "types of surveillance pricing" that each company has produced, developed or licensed -- as well as details on data collection methods, which customers were offered such products or services and other potential impacts, such as different prices paid, the FTC said. In a statement sent to The Associated Press Tuesday, Revionics said that it "does not develop software that recommends pricing targeted to specific individuals" -- or use individual consumer data "in any manner." The software company said its AI price optimization software considers several "market-level factors" to recommend optimal prices, such as historical sales data. Revionics added that its data is often sourced from retail partners -- reiterating that it "does not, in any way, conduct operations related to the surveillance of consumers." Mastercard did not comment when reached by the AP Tuesday afternoon, but confirmed that it received the FTC's request and would cooperate in the process. The remaining companies did not immediately release additional statements.

FTC orders 8 companies to provide information on 'surveillance pricing' practices

NEW YORK -- The Federal Trade Commission has ordered information from eight companies that the agency says offer products and services that use personal data to set prices based on a shopper's individual characteristics. In a Tuesday announcement, the FTC said it was seeking to better understand the "opaque market" of "surveillance pricing" practices using consumer data -- including credit information, location and browsing history -- to charge different customers different prices for the same goods. To do this, the agency noted, third-party intermediaries claim to use advanced algorithms, artificial intelligence and other technology. "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," FTC Chair Lina M. Khan said in a prepared statement. Khan added that the FTC's inquiry "will shed light on this shadowy ecosystem of pricing middlemen." The FTC said it sent orders to Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture and McKinsey & Co. The agency says its "study" will aim to understand how surveillance pricing works and investigate potential impacts on privacy and consumer protection. The orders requested information on the "types of surveillance pricing" that each company has produced, developed or licensed -- as well as details on data collection methods, which customers were offered such products or services and other potential impacts, such as different prices paid, the FTC said. In a statement sent to The Associated Press Tuesday, Revionics said that it "does not develop software that recommends pricing targeted to specific individuals" -- or use individual consumer data "in any manner." The software company said its AI price optimization software considers several "market-level factors" to recommend optimal prices, such as historical sales data. Revionics added that its data is often sourced from retail partners -- reiterating that it "does not, in any way, conduct operations related to the surveillance of consumers." Mastercard did not comment when reached by the AP Tuesday afternoon, but confirmed that it received the FTC's request and would cooperate in the process. The remaining companies did not immediately release additional statements.

FTC orders 8 companies to provide information on 'surveillance pricing' practices

NEW YORK (AP) -- The Federal Trade Commission has ordered information from eight companies that the agency says offer products and services that use personal data to set prices based on a shopper's individual characteristics. In a Tuesday announcement, the FTC said it was seeking to better understand the "opaque market" of "surveillance pricing" practices using consumer data -- including credit information, location and browsing history -- to charge different customers different prices for the same goods. To do this, the agency noted, third-party intermediaries claim to use advanced algorithms, artificial intelligence and other technology. "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," FTC Chair Lina M. Khan said in a prepared statement. Khan added that the FTC's inquiry "will shed light on this shadowy ecosystem of pricing middlemen." The FTC said it sent orders to Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture and McKinsey & Co. The agency says its "study" will aim to understand how surveillance pricing works and investigate potential impacts on privacy and consumer protection. The orders requested information on the "types of surveillance pricing" that each company has produced, developed or licensed -- as well as details on data collection methods, which customers were offered such products or services and other potential impacts, such as different prices paid, the FTC said. In a statement sent to The Associated Press Tuesday, Revionics said that it "does not develop software that recommends pricing targeted to specific individuals" -- or use individual consumer data "in any manner." The software company said its AI price optimization software considers several "market-level factors" to recommend optimal prices, such as historical sales data. Revionics added that its data is often sourced from retail partners -- reiterating that it "does not, in any way, conduct operations related to the surveillance of consumers." Mastercard did not comment when reached by the AP Tuesday afternoon, but confirmed that it received the FTC's request and would cooperate in the process. The remaining companies did not immediately release additional statements.

FTC orders 8 companies to provide information on 'surveillance pricing' practices

NEW YORK (AP) -- The Federal Trade Commission has ordered information from eight companies that the agency says offer products and services that use personal data to set prices based on a shopper's individual characteristics. In a Tuesday announcement, the FTC said it was seeking to better understand the "opaque market" of "surveillance pricing" practices using consumer data -- including credit information, location and browsing history -- to charge different customers different prices for the same goods. To do this, the agency noted, third-party intermediaries claim to use advanced algorithms, artificial intelligence and other technology. "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," FTC Chair Lina M. Khan said in a prepared statement. Khan added that the FTC's inquiry "will shed light on this shadowy ecosystem of pricing middlemen." The FTC said it sent orders to Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture and McKinsey & Co. The agency says its "study" will aim to understand how surveillance pricing works and investigate potential impacts on privacy and consumer protection. The orders requested information on the "types of surveillance pricing" that each company has produced, developed or licensed -- as well as details on data collection methods, which customers were offered such products or services and other potential impacts, such as different prices paid, the FTC said. In a statement sent to The Associated Press Tuesday, Revionics said that it "does not develop software that recommends pricing targeted to specific individuals" -- or use individual consumer data "in any manner." The software company said its AI price optimization software considers several "market-level factors" to recommend optimal prices, such as historical sales data. Revionics added that its data is often sourced from retail partners -- reiterating that it "does not, in any way, conduct operations related to the surveillance of consumers." Mastercard did not comment when reached by the AP Tuesday afternoon, but confirmed that it received the FTC's request and would cooperate in the process. The remaining companies did not immediately release additional statements.

FTC Orders 8 Companies to Provide Information on 'Surveillance Pricing' Practices

NEW YORK (AP) -- The Federal Trade Commission has ordered information from eight companies that the agency says offer products and services that use personal data to set prices based on a shopper's individual characteristics. In a Tuesday announcement, the FTC said it was seeking to better understand the "opaque market" of "surveillance pricing" practices using consumer data -- including credit information, location and browsing history -- to charge different customers different prices for the same goods. To do this, the agency noted, third-party intermediaries claim to use advanced algorithms, artificial intelligence and other technology. "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," FTC Chair Lina M. Khan said in a prepared statement. Khan added that the FTC's inquiry "will shed light on this shadowy ecosystem of pricing middlemen." The FTC said it sent orders to Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture and McKinsey & Co. The agency says its "study" will aim to understand how surveillance pricing works and investigate potential impacts on privacy and consumer protection. The orders requested information on the "types of surveillance pricing" that each company has produced, developed or licensed -- as well as details on data collection methods, which customers were offered such products or services and other potential impacts, such as different prices paid, the FTC said. In a statement sent to The Associated Press Tuesday, Revionics said that it "does not develop software that recommends pricing targeted to specific individuals" -- or use individual consumer data "in any manner." The software company said its AI price optimization software considers several "market-level factors" to recommend optimal prices, such as historical sales data. Revionics added that its data is often sourced from retail partners -- reiterating that it "does not, in any way, conduct operations related to the surveillance of consumers." Mastercard did not comment when reached by the AP Tuesday afternoon, but confirmed that it received the FTC's request and would cooperate in the process. The remaining companies did not immediately release additional statements. Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

FTC orders 8 companies to provide information on 'surveillance pricing' practices

NEW YORK -- The Federal Trade Commission has ordered information from eight companies that the agency says offer products and services that use personal data to set prices based on a shopper's individual characteristics. In a Tuesday announcement, the FTC said it was seeking to better understand the "opaque market" of "surveillance pricing" practices using consumer data -- including credit information, location and browsing history -- to charge different customers different prices for the same goods. To do this, the agency noted, third-party intermediaries claim to use advanced algorithms, artificial intelligence and other technology. "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," FTC Chair Lina M. Khan said in a prepared statement. Khan added that the FTC's inquiry "will shed light on this shadowy ecosystem of pricing middlemen." The FTC said it sent orders to Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture and McKinsey & Co. The agency says its "study" will aim to understand how surveillance pricing works and investigate potential impacts on privacy and consumer protection. The orders requested information on the "types of surveillance pricing" that each company has produced, developed or licensed -- as well as details on data collection methods, which customers were offered such products or services and other potential impacts, such as different prices paid, the FTC said. In a statement sent to The Associated Press Tuesday, Revionics said that it "does not develop software that recommends pricing targeted to specific individuals" -- or use individual consumer data "in any manner." The software company said its AI price optimization software considers several "market-level factors" to recommend optimal prices, such as historical sales data. Revionics added that its data is often sourced from retail partners -- reiterating that it "does not, in any way, conduct operations related to the surveillance of consumers." Mastercard did not comment when reached by the Tuesday afternoon, but confirmed that it received the FTC's request and would cooperate in the process. The remaining companies did not immediately release additional statements.

FTC launches probe into 'surveillance pricing' that it says links cost to customer data

FTC Chairwoman Lina Khan in Washington on May 15. Tom Williams / CQ-Roll Call, Inc via Getty Images The Federal Trade Commission is launching an investigation into so-called "surveillance pricing," seeking more information about how artificial intelligence is used to change pricing rapidly based on data about customer behavior and characteristics. The FTC says the practice allows companies to charge different customers, different prices. The agency is serving eight companies with a mandatory request for information -- all companies it says that advertise their AI and other tech tools along with a trove of customer information to target prices to individual customers. The list includes Mastercard, JPMorgan Chase, Accenture and consulting giant McKinsey. It also includes software firm Task, which counts McDonald's and Starbucks as clients; Revionics, which works with Home Depot, Tractor Supply and grocery chain Hannaford; Bloomreach, which services FreshDirect, Total Wine and Puma; and Pros, which was named Microsoft's internet service vendor of the year this year. "Firms that harvest Americans' personal data can put people's privacy at risk," FTC Chair Lina Khan said in a news release. "Now firms could be exploiting this vast trove of personal information to charge people higher prices." Kahn describes surveillance pricing as a "shadowy ecosystem of pricing middlemen." The FTC is demanding information about the types of products and services offered; how the companies collect consumer data; who their customers are; how the clients are using this product or service; and what impact it has on consumer pricing. The agency's undertaking the action under its 6(b) authority, which authorizes it to collect information for study without a specific law enforcement action. CNBC has reached out to the companies included in the FTC's requests. Mastercard said in a statement, "We will cooperate with the FTC in this process."

FTC Investigating Companies' Use of Personal Data to Set Prices

The Federal Trade Commission (FTC) is looking to learn more about companies' use of personal data to categorize individuals and set individualized prices for the same goods or service -- a practice it calls "surveillance pricing." The regulator said in a Tuesday (July 23) press release that it sent orders seeking information from eight firms that advertise their use of technology and data to set target prices for individual consumers. The FTC sent these orders using its 6(b) authority, which allows it to conduct wide-ranging studies that do not have a specific law enforcement purpose, according to the release. It sent the orders to Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture and McKinsey & Co., per the release. "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," FTC Chair Lina M. Khan said in the release. "Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing, and the FTC's inquiry will shed light on this shadowy ecosystem of pricing middlemen," Khan added. With its orders sent to the eight companies, the FTC aims to learn about the impact these practices could have on privacy, competition and consumer protection, according to the release. Specifically, the orders ask about the types of surveillance pricing products and services being offered, their current and intended uses, their data sources, their customers, and their potential impact on consumers and the prices those consumers will pay, per the release. "The FTC has long been on the front lines of documenting and investigating the hidden ecosystem of data brokers, digital platforms and other intermediaries that specialize in monitoring and selling user data," the regulator said in the release. "The FTC's 6(b) orders aim to shed light on how the current data ecosystem may facilitate the ability to target consumers with individual prices." It was reported in March that the social news aggregation and discussion website Reddit disclosed that it had received a letter from the FTC concerning its data-licensing practices related to the training of artificial intelligence (AI) systems. The company said the FTC's staff was conducting a non-public inquiry focused on Reddit's sale, licensing or sharing of user-generated content with third parties for the purpose of training AI models.

FTC will launch probe into AI-driven surveillance pricing - SiliconANGLE

The Federal Trade Commission today announced it's seeking information from eight companies that use artificial intelligence to set prices based on customers' behavior and characteristics. Known as "surveillance pricing," the companies' third-party AI systems leverage mountains of personal data to effectively ascertain a person's ability to pay for something. The systems sift through data related to credit information, browsing history, demographics, and location, and based on this will come up with a price for a certain product. Therefore, different customers might pay differing amounts for the same product. The FTC said it wants to better understand how this "opaque" type of surveillance works. "Firms that harvest Americans' personal data can put people's privacy at risk," said FTC Chair Lina M. Khan (pictured). "Now firms could be exploiting this vast trove of personal information to charge people higher prices. Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing, and the FTC's inquiry will shed light on this shadowy ecosystem of pricing middlemen." For businesses that use surveillance pricing, they might believe they are simply following the basics of capitalism and maximizing what they can get for their products based on meaningful data. For critics, there's something predatory about the practice, and naturally, there's the question of whether such discrimination is fair to consumers. Khan called the practice a "thought experiment", adding, "We're now in an environment that technologically it actually is much more possible to be serving every individual person an individual price based on everything they know about you." The companies the FTC has chosen to investigate are Mastercard Inc., Revionics, Inc., Bloomreach, Inc., JPMorgan Chase & Co., Task Software, Inc., and PROS Holdings. The agency says it will focus its probe on consumer protection and the impacts the practice has on privacy. Some of the companies have already released public statements. Revionics, a California-based software firm that offers price optimization software for retailers, said it doesn't actually "develop software that recommends pricing targeted to specific individuals" and doesn't exploit people's data whatsoever, rather it concentrates "market-level factors" to set prices.

FTC launches probe into 'surveillance pricing' that it says links cost to customer data

Lina Khan, chair of the Federal Trade Commission, speaks during the 2024 CNBC CEO Council Summit in Washington, D.C. on June 4, 2024. The Federal Trade Commission is launching an investigation into so-called "surveillance pricing," seeking more information about how artificial intelligence is used to change pricing rapidly based on data about customer behavior and characteristics. The FTC says the practice allows companies to charge different customers, different prices. The agency is serving eight companies with a mandatory request for information -- all companies it says that advertise their AI and other tech tools along with a trove of customer information to target prices to individual customers. The list includes Mastercard, JPMorgan Chase, Accenture and consulting giant McKinsey. It also includes software firm Task, which counts McDonald's and Starbucks as clients; Revionics, which works with Home Depot, Tractor Supply and grocery chain Hannaford; Bloomreach, which services FreshDirect, Total Wine and Puma; and Pros, which was named Microsoft's internet service vendor of the year this year. "Firms that harvest Americans' personal data can put people's privacy at risk," FTC Chair Lina Khan said in a news release. "Now firms could be exploiting this vast trove of personal information to charge people higher prices." Kahn describes surveillance pricing as a "shadowy ecosystem of pricing middlemen." The FTC is demanding information about the types of products and services offered; how the companies collect consumer data; who their customers are; how the clients are using this product or service; and what impact it has on consumer pricing. The agency's undertaking the action under its 6(b) authority, which authorizes it to collect information for study without a specific law enforcement action.

FTC investigates 'surveillance pricing' based on customer data

The Federal Trade Commission is investigating how companies including Mastercard and JPMorgan Chase use AI and personal data for services that let firms set different prices for different people. The FTC has issued orders seeking information from eight firms that offer so-called "surveillance pricing" products and services that incorporate data about consumers' characteristics and behaviour. The regulator says it wants to better understand the "opaque market" that sees algorithms and AI used along with personal information - such as location, demographics, credit history, and browsing or shopping history -- to categorise people and set a targeted price for a product or service. FTC chair Lina M Khan says: "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. "Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing, and the FTC's inquiry will shed light on this shadowy ecosystem of pricing middlemen." The orders have been sent to Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co. They request information on the types of surveillance pricing products and services that each company has produced; the data sources used; whom the products and services were offered to and what those customers planned to do with them; and the impacts on consumers and prices.

FTC to study surveillance pricing methods of Mastercard, Chase, other companies

The Federal Trade Commission (FTC) issued orders for eight companies to provide information about surveillance pricing as it seeks to study the potential impacts such practices have on privacy, competition and consumer protection, the agency said Tuesday. The FTC issued orders to Mastercard, Revionics, Bloomreach, Chase, Task Software, PROS, Accenture, and McKinsey & Co. The eight companies advertise their use of artificial intelligence and other technologies, along with real-time customer information, to target prices of individual consumers, the agency said. The aim is for the orders to help the FTC udnerstand the market for third-party products that use algorithms and AI with personal information, like location, demographics, credit history and browsing history, to categorize individuals and set targeted prices for products or services. FTC Chair Lina Khan said the inquiry will "shed light on this shadowy ecosystem of pricing middlemen." "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," Khan said in a statement. "Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing," she added. An FTC official declined to comment on why the specific companies were chosen, but said the aim was to look at the "middlemen companies" that help facilitate prices consumers end up seeing across a range of sectors, including grocery chains, dollar stores, retailers and quick service restaurants. The FTC official also said the orders are fairly routine and not a reflection that the companies did anything wrong, but rather a method to gain information that can be used to study and report. The orders are seeking information about the types of products and services being offered, the data sources used for each product or service, the products and services offered to customers, and the prices surveilled consumers pay.

FTC is investigating how companies are using AI to base pricing on consumer behavior

The Federal Trade Commission announced on Tuesday that it's ordering eight companies that offer AI-powered "surveillance service pricing" to turn over information about the potential impact these products have on privacy, competition, and consumer protection. With this investigation, the agency is seeking to learn more about how artificial intelligence and other technologies are being used to change pricing based on consumer behavior, location and other personal data. This practice allows companies to charge different customers different prices, the FTC says. The eight companies are Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co. The FTC says all of these companies offer services that use AI to target prices for different customers. The agency is seeking information about the types of surveillance pricing services that each company has developed and may license to third parties, along with current uses of the services. It is also seeking information about how the services are impacting consumer pricing. "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," said FTC Chair Lina M. Khan in a press release. "Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing, and the FTC's inquiry will shed light on this shadowy ecosystem of pricing middlemen." While advertisers have long used locations and past purchases to determine the types of ads that users see online, the agency is concerned that these types of practices can now be used to implement surveillance pricing.

FTC asks 8 firms to explain surveillance pricing technology

Ever shop in an incognito window to avoid paying more? This one's for you The US Federal Trade Commission (FTC) has launched an investigation into "surveillance pricing," a phenomenon likely familiar to anyone who's bought something in an incognito browser window to avoid paying a premium. Surveillance pricing, according to the FTC, is the use of algorithms, AI and other tech - most crucially combined with personal information about consumers like location, demographics, credit, the computer used, and browsing/shopping history - "to categorize individuals and set a targeted price for a product or service." The FTC on Tuesday ordered eight companies who offer surveillance pricing products to turn over information on the effect they may have on consumers' pocketbooks, privacy and competition. But don't mistake this for legal action - at this point it's all about "helping the FTC better understand the opaque market for [surveillance pricing] products by third-party intermediaries," the government agency said. "Firms that harvest Americans' personal data can put people's privacy at risk," FTC chair Lina Khan opined. "Now firms could be exploiting this vast trove of personal information to charge people higher prices." It's not exactly a secret that sellers manipulate online prices, or that consumers know about it - recommendations to shop online in an incognito browser window are plentiful and go back years. In this case, the FTC wants to know more about how Mastercard, JPMorgan Chase, Accenture and McKinsey & Co are offering surveillance pricing products. It also wants the same information from some names you may not have heard of, like Revionics, which offers surveillance pricing services to companies like The Home Depot and Tractor Supply; Task Software, which counts McDonald's and Starbucks among its customers; PROS, which supports Nestle, DigiKey and others; and Bloomreach, which provides similar services like Williams Sonoma, Total Wine, and Virgin Experience Days. The FTC wants to probe what types of surveillance pricing products exist, the services they offer, how they're collecting customer data and where it's coming from, information about who they offered services to, and what sort of impacts these may have on consumers and the prices they pay. "Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing, and the FTC's inquiry will shed light on this shadowy ecosystem of pricing middlemen," Khan said. With the investigation being carried out under the FTC's section 6(b) authority, the matter isn't being carried out with any specific legal purpose, and is only aimed at gathering information, a Commission spokesperson told The Register. That said, we're also told that if the investigation suggests someone is doing something illegal the Commission can still pursue action, though that's not the intention since surveillance pricing isn't in itself against the law - yet. The FTC didn't answer questions about whether it was considering a prohibition on surveillance pricing. The eight companies subject to the order have until the beginning of September to report to the FTC. As is common with section 6(b) investigations, the Commission will likely make some of its findings public, after which it's anyone's guess whether further action will be taken. ®

FTC launches probe into whether surveillance pricing can boost costs for consumers

Federal regulators want to know how JPMorgan Chase, Mastercard and other companies may use people's personal data to sell them a product at a different price than what other consumers might see. The practice -- which the Federal Trade Commission calls "surveillance pricing" and- is also known as dynamic pricing or price optimization -- has long been used by retailers such as Amazon and Walmart, along with ride-sharing providers, to boost profits. More recently, companies have deployed artificial intelligence and other advanced software tools to collect personal information about consumers, including their location, credit history, device type, and browsing or shopping history, which can then be used to individualize prices. "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," FTC Chair Lina Khan said Tuesday in a statement regarding the agency's inquiry. "Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing, and the FTC's inquiry will shed light on this shadowy ecosystem of pricing middlemen." A spokesperson for JPMorgan Chase declined to comment. A spokesperson for Mastercard also declined to comment, but said the credit card giant is cooperating with the FTC. The agency is also seeking information from six other companies as part of its review of surveillance pricing: management consulting firms Accenture and McKinsey & Co., and retail technology makers Bloomreach, PROS, Revionics and Task Software. Specifically, the FTC is asking the companies named in its inquiry to provide information on the surveillance pricing products and services they have developed or licensed to a third party, including how they're used. The agency is also examining how those products and services can affect the prices consumers pay. In a blog post, the FTC pointed to media reports that a growing number of retailers and grocery stores may be using algorithms to set targeted prices for different consumers. "Advancements in machine learning make it cheaper for these systems to collect and process large volumes of personal data, which can open the door for price changes based on information like your precise location, your shopping habits or your web browsing history," the agency said. "This means that consumers may now be subjected to surveillance pricing when they shop for anything, big or small, online or in person -- a house, a car, even their weekly groceries." Lawmakers are also looking at the impact of dynamic pricing. In May, Senator Sherrod Brown, D.-Ohio, held a hearing examining how such retail technologies may have contributed to ferocious inflation during the pandemic.

US FTC looking into targeted pricing based on personal data

(Reuters) - The U.S. Federal Trade Commission has launched a study of products that could allow companies to set different prices for consumers based on their locations, past purchases, and other personal data. The agency said on Tuesday it had ordered Mastercard, JPMorgan Chase, and six other companies to provide information about targeted pricing products, the data they use, who uses them and the effect on prices. The FTC is seeking the same information from IT services provider Accenture, consulting firm McKinsey & Co., and software providers Pros Holdings Inc, Revionics, Bloomreach, and Task Software. All of the companies offer products that use consumer data and artificial intelligence or other technology to target prices for individual consumers, the agency said. None of the companies are accused of wrongdoing. FTC Chair Lina Khan said the study will illuminate a "shadowy ecosystem of pricing middlemen." "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," Khan said in a statement. Online advertising has long used data such as browsing history and device location to determine what ads consumers see. The agency is concerned similar technology can now be used to set disparate prices, which it calls "surveillance pricing," or potentially collude with competitors, FTC officials said. The FTC is already considering rules aimed at protecting consumer privacy and limit what data businesses can collect without consent. (Reporting by Jody Godoy in New York; Editing by Stephen Coates)

What is surveillance pricing? And why is the FTC investigating it?

The Federal Trade Commission (FTC) announced Tuesday it initiated a probe into the often opaque practice of surveillance pricing at eight different companies. The goal of the investigation, the FTC said, is to protect citizens and look into the impact surveillance pricing has on privacy, competition, and consumer protections. But what is surveillance pricing? And how could it affect you? Surveillance pricing is a broad term to describe the practice of linking pricing to individualized consumer data. Companies employing it might use algorithms, personal information, and AI to set a price for their goods based on everything from where you live to your age to your browsing or credit history. The practice, sometimes called dynamic pricing or personalized pricing, is growing increasingly common, but isn't completely new. In 2012, the travel website Orbitz began directing people on Macs to higher hotels after realizing they often had more purchasing power. It stopped the practice after the Wall Street Journal reported on it. Yes and no. You might know about surge pricing from the last time you tried to call an Uber during a rainstorm. As demand skyrockets for a rideshare, so does the price. This is one kind of surveillance pricing, but what the FTC is targeting appears more specific. When it's raining and you need an Uber, the price is likely going up for everyone. The FTC said its probe concerns "when the pricing is based on surveillance of an individual's personal characteristics and behavior." The FTC opened its probe into companies using surveillance pricing because it's worried about the risks it might pose to consumers "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," FTC Chair Lina M. Khan said in a statement. "Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing, and the FTC's inquiry will shed light on this shadowy ecosystem of pricing middlemen." The FTC is looking into four major areas of the practice: types of products being offered, data collection, customer and sales information, and impacts on consumers and prices. Many Americans, it fears, don't know when their data is being harvested and how it is affecting what they pay. "Consumers may now be subjected to surveillance pricing when they shop for anything, big or small, online or in person: a house, a car, even their weekly groceries," the FTC said. The FTC sent the orders for more information to Accenture, Bloomreach, Chase, Mastercard, McKinsey & Co., Pros, Revionics, and Task. "Advancements in machine learning make it cheaper for these systems to collect and process large volumes of personal data, which can open the door for price changes based on information like your precise location, your shopping habits, or your web browsing history," the FTC wrote.

U.S. FTC Probes Companies Using Personal Data for Price Discrimination

The U.S. Federal Trade Commission (FTC) has initiated a study on targeted pricing products that could enable companies to set different prices for consumers based on personal data, such as location and past purchases. The FTC has ordered Mastercard (MA), JPMorgan Chase (JPM), and six other companies to provide information about their pricing products, the data they utilize, and the impact on prices. The FTC's inquiry also extends to IT services provider Accenture (ACN), consulting firm McKinsey, and software providers Pros Holdings (PRO), Revionics, Bloomreach, and Task Software. These companies offer products that leverage consumer data and artificial intelligence to tailor prices for individual consumers. FTC Chair Lina Khan emphasized the need to scrutinize this "shadowy ecosystem of pricing middlemen" and the potential exploitation of personal data for price discrimination. Market Overview: The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

JPMorgan, Mastercard, Accenture get order from FTC on surveillance pricing (NYSE:ACN)

The Federal Trade Commission sent orders to eight companies, including the U.S.'s largest bank by assets and one of the two largest card payment networks, seeking information about how their use of consumer data affects privacy, competition, and consumer protection, the agency said on Tuesday. The FTC sent the orders to Mastercard (NYSE:MA), Revionics, Bloomreach, JPMorgan Chase (NYSE:JPM), Task Software, PROS, Accenture (NYSE:ACN), and McKinsey & Co. "The orders are aimed at helping the FTC better understand the opaque market for products by third-party intermediaries that claim to use advanced algorithms, artificial intelligence and other technologies, along with personal information about consumers -- such as their location, demographics, credit history, and browsing or shopping history -- to categorize individuals and set a targeted price for a product or service," the FTC said in a statement. It wants to get a better grasp of how surveillance pricing is affecting consumers, especially when the pricing is based on tracking an individual's personal characteristics and behavior. "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," said FTC Chair Lina M. Khan. The agency said it's is using its 6(b) authority, which allows the commission to conduct wide-ranging studies that don't have a specific law enforcement purpose to obtain information from the eight firms that advertise their use of AI and other technologies to target prices for individual consumers.

McDonald's and Starbucks partner is being investigated for using AI to set prices

The Federal Trade Commission (FTC) launched an investigation into a handful of major companies over how they use customer data, algorithms, and artificial intelligence to individually tailor pricing. Eight firms across industries -- Mastercard, JPMorgan Chase, Accenture, Task Software, McKinsey & Co., Revionics, Bloomreach, and Pros -- received orders from the regulatory agency Tuesday, looking for information on the impact of this pricing practice on privacy, competition, and consumer protection. Using data tools, like AI, companies employ a practice known as "surveillance pricing" (sometimes called "dynamic pricing") to show different prices to consumers for the same products based on their characteristics or behaviors. These can include location, demographics, credit history, and browsing or shopping history. Many of the companies contacted by the FTC provide transaction, sales, and pricing services to some of the biggest firms in the U.S. and globally. Task is the transaction management firm behind several major hospitality companies, including McDonald's and Starbucks. Revionics provides retail price optimization software and pricing analytics to several global chains, including Home Depot. Pros, a software company that touts itself as a provider of AI-powered solutions for pricing, counts Nestlé, HP, and United Airlines among its clients. It's also a technology development partner of Microsoft. The FTC is looking to get to the bottom of this "opaque market" that categorizes shoppers and sets targeted prices for products and services. "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," said FTC Chair Lina Khan in a statement. "Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing, and the FTC's inquiry will shed light on this shadowy ecosystem of pricing middlemen." The FTC said it's looking for information in four key areas: the types of surveillance pricing products and services each company offers; how they are collecting data; customer and sales information; and how these surveillance practices influence the prices customers end up paying.