Armed with detailed information about consumers — such as their location, demographics, credit history, and browsing or shopping history — companies can personalize prices for goods and services that people would not expect to vary from person to person. The FTC has issued compulsory orders to eight companies that advertise their use of AI and other technologies, along with historical and real-time customer information, to target prices for specific consumers. The orders for documents related to the targeted pricing technologies were sent to Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co. “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 orders seek information on four areas:The Federal Trade Commission (FTC) has launched an investigation into “surveillance pricing,” a practice where companies use artificial intelligence and algorithms to tailor prices to individual customers.
Types of products and services being offered: The types of surveillance pricing products and services that each company has produced, developed, or licensed to a third party, and details about the technical implementation and uses of this technology Data collection and inputs: Information on the data sources used for each product or service, including the data collection methods for each data source, the platforms and methods that were used to collect such data, and whether that data is collected by third parties Customer and sales information: Information about whom the products and services were offered to and what those customers planned to do with those products or services Impacts on consumers and prices: Information on the potential impact of these products and services on surveilled consumers including the prices they pay The FTC voted 5-0 to issue the orders to the eight companies. “All Americans generate tremendous amounts of personal data online,” Commissioner Andrew Ferguson said in a statement. “These data often include information that reflects, or from which can be gleaned, some of our most intimate details—our identities, interests, locations, credit histories, medical conditions, sexual interests, and religious and political views,” he added. “Consumers are generally unaware that merchants and brokers are gathering those data. And those who are aware generally have no idea how and to whom those data are packaged and sold, or how they are used.” He explained that the practice of using targeted pricing technologies is commonplace and it is critical for the Commission to examine its impact. “Technology moves faster than government,” he stated. “There is no time to delay a study on personalized pricing if we hope to investigate the practice at its nascency — or, if the practice is already pervasive, to catch up on it.”
