In a bid to uncover potential price discrimination practices, federal regulators are conducting an inquiry into the use of personal data by major companies such as JPMorgan Chase, Mastercard, and others. The practice in question, known as "surveillance pricing," involves tailoring prices based on individual consumer data, potentially resulting in different prices for different customers.

The Federal Trade Commission (FTC) has labeled this practice as "surveillance pricing," also referred to as dynamic pricing or price optimization. While retail giants like Amazon and Walmart have long employed these strategies to maximize profits, the recent infusion of advanced technologies like artificial intelligence has enabled companies to collect extensive personal information about consumers, including location, credit history, device type, and browsing and shopping habits, to personalize pricing.

FTC Chair Lina Khan, in a statement on Tuesday, expressed concerns over the potential risks to consumer privacy posed by firms that harvest personal data. She emphasized the need for transparency, stating that Americans deserve to know if businesses are leveraging detailed consumer data for surveillance pricing schemes. The FTC's inquiry aims to shed light on the opaque ecosystem of pricing intermediaries.

Both JPMorgan Chase and Mastercard have refrained from commenting on the matter; however, Mastercard assured its cooperation with the FTC. Additionally, the FTC is seeking information from six other entities, including management consulting companies Accenture and McKinsey & Co., as well as technology providers Bloomreach, PROS, Revionics, and Task Software, as part of their review of surveillance pricing.

The agency is specifically requesting information on the surveillance pricing products and services developed or licensed by the companies and how they are utilized. Furthermore, the FTC aims to examine the potential impact of these products and services on consumer prices.

Highlighting the potential risks involved, the FTC blog post referred to media reports indicating that an increasing number of retailers and grocery stores utilize algorithms to set targeted prices for different consumers. The agency expressed concerns that machine learning advancements have made it easier for these systems to collect and process vast amounts of personal data, potentially resulting in changes to prices based on factors such as location, shopping habits, and web browsing history.

The investigation comes against the backdrop of lawmakers also scrutinizing dynamic pricing practices. In May, Senator Sherrod Brown held a hearing to examine how such retail technologies may have contributed to inflation during the pandemic.

Jonathan Donenberg, deputy director of the National Economic Council, commended the FTC's probe, highlighting how these practices could lead to opaque and potentially anticompetitive behavior, with different individuals being charged different prices.

As the inquiry unfolds, consumers await the results that could bring to light the extent to which their personal data is utilized for surveillance pricing, and whether regulatory measures may be necessary to ensure transparency and fairness in pricing practices.