Illustration: Gabriella Turrisi/Axios
The Federal Trade Commission wants to know more about the practice of setting dynamic pricing for products and services based on customer behavior, per an announcement Tuesday morning.
Why it matters: The FTC's study could highlight how companies are able to set different prices for different people — and how they're profiting from it.
Driving the news: The FTC issued orders to eight companies that engage in "surveillance pricing," or using algorithms, AI and personal information to set individualized prices.
- The eight companies include: Mastercard, Revionics, Bloomreach, Chase, Task Software, PROS, Accenture and McKinsey & Co.
What they're saying: "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 Khan in the release.
- "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."
FTC officials told reporters on a call that the study is part of the agency's goal to protect consumers from price gouging and scams.
- It's specifically going after "intermediary" companies that advertise their dynamic pricing services work between consumers and retailers or service providers, the officials said.
- Such companies have publicly advertised their use of AI tools to offer these services, the officials said.
How it works: The agency is using 6(b) authority, which allows it to get non-public information from companies without a specific law enforcement purpose.
- The FTC wants to know what types of products and services are being offered, how they collect data, information on customers and sales and how such practices are impacting consumers and prices.
