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The Federal Trade Commission is investigating "surveillance pricing," where a vendor can tap your personal data to secretly increase what you pay at checkout.
The agency is asking eight “middlemen” companies to reveal how they combine computer algorithms and people’s personal information to adjust pricing.
“Now firms could be exploiting this vast trove of personal information to charge people higher prices,” FTC Chair Lina Khan said in Tuesday’s announcement. “Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing.”
The eight are Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co, which can help companies personalize their products for consumers. But the same capabilities can also enable “dynamic pricing" to alter a product’s price in real-time based on a variety of opaque factors.
The FTC says this is a study rather than an enforcement action. Nevertheless, the commission is concerned that pricing surveillance could be used widely across the industry without any awareness from the public.
“This means that consumers may now be subjected to surveillance pricing when they shop for anything, big or small, online or in person: a house, a car, even their weekly groceries,” the FTC wrote in a blog post.
The FTC’s probe promises to help it understand the full scope of surveillance pricing, including the personal data analyzed and the vendors using the technology to set prices. The commission has given the eight companies 45 days to respond.