Major Corps Face FTC Probe on AI-Priced Surveillance

Published Date: 24/07/2024

The Federal Trade Commission investigates eight companies, including Mastercard, JPMorgan Chase, and McKinsey, over the use of AI-powered surveillance pricing tools that potentially exploit consumer data.

"The Federal Trade Commission (FTC) has launched an investigation into the practice of 'surveillance pricing' by eight major corporations, including Mastercard, JPMorgan Chase, McKinsey & Co., Accenture, Pros Holdings Inc., Revionics, Bloomreach, and Task Software. These companies offer tools that utilize artificial intelligence (AI) and other technologies to analyze consumer data and help set price targets for products and services.

The FTC's probe aims to improve its understanding of how these companies use personal information, such as location, demographics, credit history, and browsing or shopping history, to categorize individuals and set targeted prices. FTC Chair Lina Khan expressed concern that these companies could be using surveillance pricing to raise consumers' prices.

'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,' Khan said in a statement. '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's study of surveillance pricing uses the agency's 6(b) authority to request information from companies for wide-ranging studies that aren't serving a specific law enforcement purpose. The agency has requested information about the types of products and services being offered, data collection sources and methods, customer and sales information, as well as information about the potential impact of surveillance pricing products and services on surveilled consumers — including the prices they pay.

The FTC is concerned that these tools could be used to unfairly target certain demographics or individuals, potentially leading to higher prices for certain groups. The agency's investigation could lead to future regulatory action by the FTC and other regulators, such as the Consumer Financial Protection Bureau (CFPB), regarding the use of consumer data.

  Information 

The Federal Trade Commission (FTC) is an independent agency of the United States government that aims to promote consumer protection and competition.

Mastercard is a multinational financial services corporation that provides payment processing and other financial services.

JPMorgan Chase is a multinational banking and financial services holding company.

McKinsey & Co. is a management consulting firm that provides strategic advice to corporations and organizations.

Accenture is a multinational management consulting and professional services company that provides strategy, consulting, digital, technology, and operations services.

Pros Holdings Inc. is a software company that provides AI-powered solutions for pricing and revenue management.

Revionics is a retail technology company that provides AI-powered pricing and markdown optimization solutions.

Bloomreach is a technology company that provides AI-powered digital experience and commerce solutions.

Task Software is a technology company that provides AI-powered pricing and inventory management solutions.

The Federal Trade Commission (FTC) is an independent agency of the United States government that aims to promote consumer protection and competition."

FAQs:

"Q: What is surveillance pricing?

A: Surveillance pricing refers to the practice of using artificial intelligence (AI) and other technologies to analyze consumer data and help set price targets for products and services.

Q: Which companies are being investigated by the FTC?

A: The FTC is investigating eight companies, including Mastercard, JPMorgan Chase, McKinsey & Co., Accenture, Pros Holdings Inc., Revionics, Bloomreach, and Task Software.

Q: What is the concern of the FTC regarding surveillance pricing?

A: The FTC is concerned that surveillance pricing could be used to unfairly target certain demographics or individuals, potentially leading to higher prices for certain groups.

Q: What is the potential outcome of the FTC's investigation?

A: The FTC's investigation could lead to future regulatory action by the FTC and other regulators, such as the Consumer Financial Protection Bureau (CFPB), regarding the use of consumer data.

Q: What is the purpose of the FTC's 6(b) authority?

A: The FTC's 6(b) authority allows the agency to request information from companies for wide-ranging studies that aren't serving a specific law enforcement purpose."

Biometric Products & Solutions

BioEnable offers a wide range of cutting-edge biometric products and solutions: