WASHINGTON, D.C. — The Federal Trade Commission (FTC) has sent orders to eight companies that offer surveillance pricing products and services. The FTC is investigating how these practices affect privacy, competition, and consumer protection.
The companies use advanced algorithms, artificial intelligence, and personal consumer data to set targeted prices for goods and services. This data includes location, demographics, credit history, and browsing or shopping history.
“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. “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 Companies Under Investigation
The orders were sent to Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co. These companies advertise their use of AI and other technologies to target prices for individual consumers.
Areas of Inquiry
The FTC seeks information in four key areas:
- Types of Products and Services: Details on the surveillance pricing products and services developed or licensed by these companies, including their technical implementation and uses.
- Data Collection and Inputs: Information on the data sources used for these products, how the data is collected, and whether other parties are involved in data collection.
- Customer and Sales Information: Who the products and services are offered to and the intended use by those customers.
- Impacts on Consumers and Prices: The potential impact of these products on the prices paid by surveilled consumers.
The Goal of the Investigation
The FTC is using its 6(b) authority to conduct this wide-ranging study. This authority allows the Commission to gather information for studies that do not have a specific law enforcement purpose.
The investigation aims to uncover the details of this opaque market. By understanding how surveillance pricing works, the FTC can better protect consumers from potential exploitation.
Safeguarding Consumer Privacy in Pricing Practices
The FTC’s inquiry into surveillance pricing practices marks a significant step in protecting consumer privacy and ensuring fair competition. As firms increasingly use personal data to set prices, this investigation will provide crucial insights into the potential risks and impacts on consumers. The FTC will continue to monitor and regulate such practices to safeguard public interests.
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