FTC launches probe into data-driven targeted pricing practices by eight major companies

The U.S. Federal Trade Commission has launched an investigation into products that allow companies to charge consumers different prices based on their location, past purchases and other personal information. FTC announced on Tuesday that it had ordered Mastercard, JP Morgan Chase and six other companies to disclose information about the products covered by the target pricing system, including the data they use, their users and the impact on prices.

In addition to Mastercard and JP 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. Those companies offer products that use consumer data and artificial intelligence or other technology to tailor prices to individual consumers, the agency said.

Lina Khan, chairwoman of the Federal Trade Commission (FTC), emphasized that the aim of the study is to shed light on the “opaque ecosystem of price intermediaries.”

“Companies that collect Americans’ personal data can put people’s privacy at risk. Now, companies can use this massive trove of personal data to charge people more,” Khan said in a statement.

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While the companies involved in the case are not accused of any wrongdoing, the FTC investigation is aimed at understanding the impact 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 ads consumers see.

Source: Reuters