The Federal Trade Commission has announced that it will investigate surveillance pricing to understand better its potential impacts on privacy and consumers.
Surveillance pricing involves using customer information, such as their home address, demographics, and shopping habits, to categorize individuals and determine the prices for services or products. It should not be confused with dynamic pricing, which adjusts prices based on demand and other factors.
Eight companies, including Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co, have been ordered to provide information about their real-time customer tracking services using artificial intelligence and other technologies to the FTC. Read more here.
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According to the FTC, the goal of the investigation is to understand the impact of surveillance technology on consumers, including the prices they pay and the personal data used to determine those prices.
While adjusting prices based on the customer is not a new practice, the use of surveillance technology to determine prices based on consumer habits is becoming more common, raising concerns about privacy.
Advancements in technology have made it easier for companies to gather personal information in large quantities without consumers’ knowledge, leading to potential privacy issues. Even grocery stores are beginning to use algorithms for targeted pricing, the FTC noted.
The agency aims to uncover how companies obtain consumer data and which businesses are incorporating surveillance technology into their operations.
