The Federal Trade Commission (FTC) announced on Tuesday an investigation into eight companies that offer AI-powered "surveillance service pricing," seeking information on the potential effects of these products on privacy, competition, and consumer protection.
The companies under scrutiny are Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co. These firms provide services that utilize artificial intelligence to adjust pricing based on consumer behavior, location, and other personal data, a practice that enables charging different prices to different customers.
The FTC aims to understand how AI and other technologies are being used to tailor prices and the subsequent impact on consumer pricing. The agency has requested detailed information from the companies about the development and licensing of these surveillance pricing services, as well as their current applications.
FTC Chair Lina M. Khan highlighted the potential risks involved: “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 practice of using consumer data for targeted advertising is well-established, but the FTC is concerned that similar techniques are now being employed to implement surveillance pricing, potentially leading to higher prices for some consumers based on detailed personal data.
This investigation marks a significant step in examining the intersection of AI, consumer data, and pricing strategies, aiming to ensure transparency and protect consumer rights in the digital age.
