Trump’s FTC opens the floodgates for tariff profiteering
PROS Holdings and co will make billions telling companies how to rip you off.
I’m on a 20+ city book tour for my new novel Picks and Shovels. Catch me at NEW ZEALAND’S UNITY BOOKS in AUCKLAND (May 2, 6PM) and WELLINGTON (May 3, 3PM). More tour stops (Pittsburgh, PDX, London, Manchester) here.
Have you heard that tariffs are going to drive prices up? Me too. There’s a good reason we’re hearing a lot of talk about tariffs prices: tariffs are a tax that is ultimately paid by consumers. Trump plans to raise $6t in tariffs, making them the largest tax increase in US history:
But that $6t is just for starters. If there’s one thing we learned from the pandemic supply-chain shocks, it’s that corporate CEOs never let an emergency go to waste. Bosses, knowing that you’d been warned to expect higher prices, went ahead and jacked up their prices way over inflation, blaming it on covid, on stimulus checks, on Biden, on the phase of the moon. Blaming it on anything — except greed. That’s why we called it “excuseflation”:
https://pluralistic.net/2023/03/11/price-over-volume/#pepsi-pricing-power
How do we know that bosses were jacking up prices? They told us so! In investor calls, corporate executives boasted that “consumer expectations” gave them “pricing power,” and that they were making bank from it. From oil to eggs, excuseflation — greedflation — is everywhere:
https://pluralistic.net/2023/01/23/cant-make-an-omelet/#keep-calm-and-crack-on
Neoclassical economists insist that this is impossible. For greedflation to be real, companies would have to somehow collude to raise prices. After all, if prices go up for one seller and not another, shoppers will follow the invisible hand as it points them to those bargains. There’s some truth to that, in a competitive market. But what if we were to waste 40 years, waving through anticompetitive mergers until most sectors of the economy were dominated by five or fewer companies:
https://www.openmarketsinstitute.org/learn/monopoly-by-the-numbers
When a sector is controlled by a handful of firms, there’s plenty of opportunities for “tacit collusion.” And not all the collusion is tacit: in concentrated sectors, all the C-suite types know each other. They’ve worked with each other for their whole careers, jumping from one company to another. They’re godparents to each others’ children, executors of one-another’s estate, members of the same polycules. No wonder the Communist revolutionary Adam Smith wrote:
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
But we live in the computer age. We aren’t cavemen, confined to whispering price information to one another with our flapping meat-mouths. We have computers! Better still, we have data brokers, who allow for collusive price-raising, gather price data from all the dominant players in a sector, then “advising” each company on how to set its prices. Somehow, the optimal, coordinate pricing strategy is always to make prices higher. That’s true with meat:
https://pluralistic.net/2023/10/04/dont-let-your-meat-loaf/#meaty-beaty-big-and-bouncy
And it’s true with rent:
https://pluralistic.net/2024/12/11/nimby-yimby-fimby/#home-team-advantage
This kind of third-party price-rigging is illegal, of course, but decades of antitrust neglect allowed these “economic termites” to multiply and fill the walls of our society:
https://www.thebignewsletter.com/p/economic-termites-are-everywhere
But never let it be said that monopolists can’t innovate. Thanks to the total failure of Congress to pass consumer privacy legislation since 1988, the humble price-fixing data-broker has transformed into the “surveillance pricing” industry:
https://pluralistic.net/2024/06/05/your-price-named/#privacy-first-again
With surveillance pricing, sellers buy your financial data from the unregulated data-broker industry and use it to set a different price for every customer. For example, McDonald’s has invested in a company called “Plexure” that can tell when someone at the drive-through has just been paid, so that the seller can add a dollar to the price of their daily breakfast sandwich. And surveillance pricing isn’t limited to buyers — sellers can get surveillance-priced, too. Take nurses, whose staffing agencies have been replaced by a cartel of three apps that buy nurses’ credit data before offering them a shift, so that they can offer a lower wage to nurses carrying high credit-card debts (indebted, desperate workers will sell their labor for less):
https://pluralistic.net/2024/12/18/loose-flapping-ends/#luigi-has-a-point
The industry calls this “personalized pricing,” and and they tout the possibility that it will result in poorer people getting bargains from sellers who know just how little they can afford. In their telling, it’s a kind of cod-Marxism, organized around “to each according to their ability (to pay):
https://pluralistic.net/2025/01/11/socialism-for-the-wealthy/#rugged-individualism-for-the-poor
There’s precious little evidence that personalized pricing is lowering anyone’s prices. Indeed, the main benefit of personalized pricing — apart from price-gouging, that is — is that it’s hard to detect. When prices are different for every customer, how does a customer know they’re getting ripped off?
That’s what Biden’s FTC set out to discover. Last summer, they opened an investigation into surveillance pricing, with the goal of cracking down on the practice:
https://pluralistic.net/2024/07/24/gouging-the-all-seeing-eye/#i-spy
Then came the election, and a change in leadership at the FTC. Out with Lina Khan, the most effective FTC chair in generations, in with Andrew Ferguson, the decidedly mid Trump footsoldier whose first official act was to kill the surveillance pricing investigation and replace it with an internal snitch-line where FTC employees could report each other for being “woke”:
https://pluralistic.net/2025/01/24/enforcement-priorities/#enemies-lists
This is a damned shame, because the country’s largest, most successful “pricing consultancies” — like PROS Holding — are advising their clients to get ready to jack up prices in order to take advantage of consumer expectations of inflation from tariffs, as Katya Schwenk reports for The Lever:
https://www.levernews.com/how-trump-is-helping-price-gougers-exploit-his-tariffs/
You don’t have to take Schwenk’s word for it. You can watch pricing guru Craig Zawada’s webinar for yourself:
https://pros.com/learn/webinars/navigating-tariff-increases-future-proof-pricing-strategy
Zawada works for PROS Holdings, a notorious price-setting technology provider. In the webinar, Zawada tells viewers that thanks to tariffs, “there is perhaps more of a window to make changes to your pricing than there has been before…customers expect change. Now is the time to take advantage.”
Of course, you’re the one he wants them to take advantage of.
PROS is one of the firms targeted by Khan’s FTC and let off the hook under Ferguson. A former FTC official summed it up nicely: “The message that is coming out of this administration… is that the watchdog is gone and companies feel emboldened to rip people off. It’s open season on American consumers.”
What’s open season look like? Pricing consultant Drew Marconi hosted a webinar where he advised clients “You may just have to rip the Band-Aid — jack up prices and see what happens. You’re going to be surprised by how much room you have”:
https://www.linkedin.com/events/7315531163840774144/comments/
And the firms are listening. Autozone’s last 2024 earnings call included this reassuring news: “if we get tariffs… we’ll generally raise prices ahead of — [when] we know what the tariffs will be”:
https://seekingalpha.com/article/4723049-autozone-inc-azo-q4-2024-earnings-call-transcript
Pricing consultants are advising their clients against charging “tariff surcharges,” noting that customers will expect these to go away when (if) the tariffs end. Instead, they advise businesses to raise prices in expectation of “faster, lasting implementation of price increases”:
https://www.washingtonpost.com/business/2024/10/30/companies-tariffs-trump-prices/
Ferguson has warned that the FTC will crack down on tariff profiteers who raise prices over and above the additional costs imposed by tariffs. But he said this even as he was shutting down the agency’s investigations into the companies that facilitate exactly this kind of profiteering. Still, Ferguson is ridding the FTC of “woke.” I’m sure that’ll be a comfort to Americans as they fill in a loan application so they can afford a new tire for their car.
If you’d like an essay-formatted version of this post to read or share, here’s a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2025/04/21/trumpflation/#andrew-ferguson
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Cryteria (modified)
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