If your retail business uses AI to adjust prices based on customer data, you’re operating in the middle of an accelerating regulatory storm. The Federal Trade Commission launched a surveillance pricing investigation in 2024, California’s Attorney General opened a sweep on January 27, 2026, and New York enacted a pricing transparency law requiring disclosure when algorithms set prices using personal data. For retail operations managers and compliance officers, this isn’t a future risk — it’s a current one.
The FTC’s preliminary findings, released in January 2025, found that AI-driven pricing tools used consumer data including location, browsing history, purchase patterns, and even mouse movements on webpages to set individualized prices. The agency examined intermediaries working with at least 250 retail clients across grocery, apparel, and other sectors.
What the FTC Actually Found
The FTC’s surveillance pricing study focused on third-party intermediaries — companies hired by retailers to algorithmically set and adjust prices. According to the FTC, these systems can show higher-priced products based on a consumer’s search and purchase history. One example from the FTC’s findings: a consumer profiled as a new parent may be shown higher-priced baby thermometers on the first page of search results.
The study found that some intermediaries can determine individualized pricing and discounts based on granular consumer data, including targeting promotions to specific skin types. The FTC examined documents from Mastercard, Accenture, PROS, Bloomreach, Revionics, and McKinsey & Co. as part of the investigation.
DOJ Assistant Attorney General Gail Slater stated in August 2025 that algorithmic pricing probes will increase as AI use grows, warning that firms should “perform their own due diligence on shared algorithm inputs and functionality to prevent collusion that can harm consumers.”
What Retailers Need to Do This Quarter
The regulatory picture varies by jurisdiction, but three actions apply regardless of where you operate.
First, audit your pricing algorithm inputs. The FTC’s concern centers on non-public consumer data — location, browsing history, demographics — being used to set individualized prices. If your pricing system uses this data, document exactly what data is used, how it’s obtained, and whether it includes any information sourced from competitors.
Second, review vendor relationships. If you use a third-party pricing intermediary, request documentation of how their algorithms work and what data sources they use. The FTC’s investigation targeted intermediaries directly, but the retailers using those tools face compliance exposure too.
Third, check state-specific requirements. New York’s pricing transparency law requires disclosure when algorithms use personal data to set prices. California’s January 2026 sweep signals similar requirements may follow. If you operate in multiple states, a patchwork of requirements is already in effect.
Key Takeaways
- The FTC found AI pricing intermediaries used consumer data including mouse movements and browsing history to set individualized prices across at least 250 retail clients, according to the FTC’s January 2025 findings
- California opened a new AI pricing investigation in January 2026, and New York enacted a law requiring disclosure when algorithms use personal data to set prices
- DOJ has signaled algorithmic pricing probes will increase — retailers should document pricing algorithm inputs and audit third-party vendor data practices now
Is your current pricing system documented well enough to explain to a regulator exactly what consumer data it uses and why?
Source: Federal Trade Commission