FTC Launches Study on Data-Driven Targeted Pricing Practices by Eight Major Companies

The U.S. Federal Trade Commission has initiated an inquiry into products that enable companies to set different prices for consumers based on their locations, past purchases, and other personal data. The FTC announced on Tuesday that it had ordered Mastercard, J.P. Morgan Chase, and six other companies to disclose information about targeted pricing products, including the data they utilize, their users and the impact on prices.

In addition to Mastercard and J.P. Morgan Chase, the FTC is seeking similar information about targeted pricing from IT services provider Accenture, consulting firm McKinsey & Co., and software providers Pros Holdings, Revionics, Bloomreach and Task Software. These companies offer products that leverage consumer data and artificial intelligence or other technology to tailor prices for individual consumers, the agency stated.

FTC Chair Lina Khan highlighted the goal of the study as shedding light on a “shadowy ecosystem of pricing middlemen.”

“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,” Khan said in a statement.

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While the companies involved are not accused of any wrongdoing, the FTC investigation aims to understand the implications of targeted pricing on consumer privacy and price fairness. The use of consumer data in online advertising, such as browsing history and device location, has long influenced the advertisements seen by consumers.

Source: Reuters