The Federal Trade Commission (FTC) announced on Tuesday that it is directing eight companies that offer AI-powered “surveillance service pricing” to provide information regarding the potential effects of these products on privacy, competition, and consumer protection.
The FTC aims to understand how artificial intelligence and other technologies are used to adjust pricing based on consumer behavior, location, and other personal data. This method enables companies to charge different prices to different customers, according to the FTC.
The companies involved are Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co. The FTC states that these companies offer services utilizing AI to tailor prices for various customers.
The agency is requesting details about the types of surveillance pricing services each company has developed and may license to third parties, as well as current uses of these services. It also seeks information on how these services affect consumer pricing.
“Companies that gather Americans’ personal data can compromise people’s privacy. These firms might be using this extensive personal information to charge higher prices,” said FTC Chair Lina M. Khan in a press release. “Americans have the right to know if businesses are using detailed consumer data for surveillance pricing, and the FTC’s investigation will illuminate this opaque pricing ecosystem.”
While advertisers have historically used location data and past purchases to tailor online ads, the FTC is concerned that these practices can now be used to implement surveillance pricing.
