FTC investigates AI-powered pricing practices
These AI-driven models change pricing based on consumer behaviour, location, and personal data, potentially leading to different prices for different customers.
The US Federal Trade Commission (FTC) announced a probe into eight companies using AI-powered ‘surveillance service pricing’ to evaluate its impact on privacy, competition, and consumer protection. The companies under scrutiny include Mastercard, JPMorgan Chase, Revionics, Bloomreach, Task Software, PROS, Accenture, and McKinsey & Co. These firms use AI to adjust pricing based on consumer behaviour, location, and personal data, potentially leading to different prices for different customers.
The FTC’s investigation aims to uncover the types of surveillance pricing services developed by these companies and their current applications. The agency seeks to understand how these AI-driven pricing models affect consumer pricing and whether they exploit personal data to charge higher prices. FTC Chair Lina M. Khan emphasised the risks to privacy and the potential exploitation of personal data in her statement, highlighting the need for transparency in how businesses use consumer information.
This inquiry reflects growing concerns about using AI and other technologies to set personalised prices based on detailed consumer data. The FTC’s actions aim to shed light on these practices and ensure consumer protection in an increasingly data-driven market.
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