The Federal Trade Commission has announced an investigation into surveillance pricing to understand its potential impact on privacy and consumers.
Surveillance pricing uses customer information, such as home address, demographics, and shopping habits, to categorize individuals and set prices for products or services. It should not be confused with dynamic pricing, which adjusts prices based on demand and other factors.
Eight companies utilizing artificial intelligence and other technologies to track real-time customer information – Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co – have been ordered to provide information about their tracking products to the FTC. Orders were sent to these companies.
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According to the FTC, the aim of this investigation is to understand how surveillance technology affects consumers, including the prices they pay and the personal data used to determine those prices.
While changing prices based on buyer demographics is not uncommon, the use of surveillance technology to analyze consumer habits for price determination is on the rise, raising concerns about privacy.
Advancements in technology have made it easier for companies to gather large volumes of consumer data, sometimes without the consumer’s knowledge. Even grocery stores are starting to implement algorithms for targeted pricing, the FTC noted.
The FTC also seeks to identify companies incorporating surveillance technology into their business practices in addition to understanding how consumer data is obtained.
