The Federal Trade Commission has announced that it will investigate surveillance pricing to understand its potential impact on privacy and consumers.
Surveillance pricing involves using customer information such as home address, demographics, and shopping habits to categorize individuals and determine prices for products or services. This is different from dynamic pricing, which adjusts prices based on demand and other factors.
The FTC has sent orders to eight companies, including Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co, to provide information about their real-time customer tracking products using artificial intelligence and other technology.
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The FTC aims to understand how surveillance technology affects consumers, including the prices they pay and the personal data used to determine those prices, by examining the actors, tactics, and pipelines involved in surveillance pricing.
While changing prices based on buyer behavior is not new, the use of surveillance technology to analyze consumer habits and set prices is becoming more common, raising privacy concerns.
Advancements in technology have made it easier for companies to collect large amounts of consumer data without their knowledge, with even grocery stores using algorithms to set targeted prices, according to the FTC.
The agency also seeks to understand how companies obtain consumer data and which ones use surveillance technology in their business practices.
