FTC Chair Lina (Photo credit: Al Drago/Bloomberg )

The United States Federal Trade Commission (FTC) has launched an investigation into eight major companies over their use of artificial intelligence-powered surveillance pricing.

This practice involves utilizing consumers’ personal data, such as browsing history, location, and even credit scores, to set individualized prices for goods and services.

The FTC’s inquiry aims to uncover how these personalized pricing models, driven by AI and other technologies, impact consumers’ privacy, competition, and overall consumer protection, the agency said in a July 23 notice, expressing concerns about the potential for discriminatory pricing and the lack of transparency surrounding these practices.

The eight companies in question include Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co. The authority said these firms offer services that use AI to target prices for different customers.

“Firms that harvest Americans’ personal data can put people’s privacy at risk,” said FTC Chair Lina Khan. “Now firms could be exploiting this vast trove of personal information to charge people higher prices.”

“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.”

The FTC has issued orders to the eight companies, demanding information on the types of surveillance pricing products and services they offer, the data they collect, and the potential impact on consumers. The agency is utilizing its 6(b) authority, which allows it to conduct wide-ranging studies without a specific law enforcement purpose.

An FTC spokesperson reportedly clarified that none of the companies have been accused of any wrongdoing, explaining that the investigation attempts to “lift the hood on opaque practices that have the potential to profoundly reshape how consumers purchase goods and services.”

“We want to make sure that surveillance pricing isn’t resulting in harm to certain communities, like women and rural consumers,” they added.