FTC launches probe into 'surveillance pricing'
The FTC investigates "surveillance pricing," where AI adjusts prices based on customer data. Eight companies, including Mastercard and JPMorgan Chase, face scrutiny over personalized pricing practices. Concerns about privacy risks are raised.
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The Federal Trade Commission (FTC) has initiated an investigation into "surveillance pricing," focusing on how artificial intelligence is utilized to adjust prices rapidly based on customer data. This practice enables companies to apply different prices to different customers. The FTC is targeting eight companies with a mandatory request for information, all of which promote their AI capabilities to tailor prices for individual customers. Companies like Mastercard, JPMorgan Chase, Accenture, McKinsey, Task, Revionics, Bloomreach, and Pros are among those under scrutiny. FTC Chair Lina Khan expressed concerns about potential privacy risks associated with firms leveraging personal data to set higher prices. The investigation aims to gather details on the products and services offered, consumer data collection methods, customer profiles, and the impact on pricing. The FTC is conducting this inquiry under its 6(b) authority, allowing data collection for analysis without immediate enforcement actions. Some companies, like Mastercard and Revionics, have stated their willingness to cooperate with the FTC and clarified their practices regarding personalized pricing recommendations.
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