FTC is investigating how companies are using AI to base pricing on consumer behavior

The Federal Trade Commission announced on Tuesday that it’s ordering eight companies that offer AI-powered “surveillance service pricing” to turn over information about the potential impact these products have on privacy, competition, and consumer protection. 

With this investigation, the agency is seeking to learn more about how artificial intelligence and other technologies are being used to change pricing based on consumer behavior, location and other personal data. This practice allows companies to charge different customers different prices, the FTC says. 

The eight companies are Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co. The FTC says all of these companies offer services that use AI to target prices for different customers. 

The agency is seeking information about the types of surveillance pricing services that each company has developed and may license to third parties, along with current uses of the services. It is also seeking information about how the services are impacting consumer pricing. 

“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 M. Khan in a press 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.”

While advertisers have long used locations and past purchases to determine the types of ads that users see online, the agency is concerned that these types of practices can now be used to implement surveillance pricing.