Instacart AI Pricing Tool Faces FTC Investigation

The Federal Trade Commission (FTC) has sent the grocery delivery platform a civil investigative demand seeking information about its Eversight tool, Reuters reported Wednesday (Dec. 17), citing sources familiar with the matter.

According to the report, Eversight, a 2022 Instacart acquisition that lets retailers on the platforms experiment with different prices using AI, has been the subject of criticism following a recent Consumer Reports study. It found that different shoppers got different prices for the same products on Instacart.

“The Federal Trade Commission has a longstanding policy of not commenting on any potential or ongoing investigations. But, like so many Americans, we are disturbed by what we have read in the press about Instacart’s alleged pricing practices,” the FTC said in a statement.

The Reuters report adds that the launch of a probe does not prove wrongdoing and not all FTC investigations lead to lawsuits.

The study in question was published by Consumer Reports last week in partnership with advocacy groups Groundwork Collaborative and More Perfect Union.

It involved 437 shoppers in four cities, who saw vastly different prices on the same grocers from the same stores. There was, on average, a 7% difference in the total cost for the same grocery list at the same locations, the study found.

“Some shoppers found grocery prices that were up to 23% higher than prices available to other shoppers for the exact same items, in the exact same store, at the exact same time,” the study’s authors wrote.

PYMNTS has contacted Instacart for comment but has not yet gotten a reply. In a blog post last week, the company argued that the study had led to media reports that had “inaccurately blurred together fundamentally different things: A/B price tests, dynamic pricing, and surveillance pricing.”

The company said that the tests were not dynamic pricing and that it doesn’t use personal, demographic, or user-level behavioral data to set prices. It also said that a claim in the study that these tests add $1,200 to a typical family’s annual grocery bill is incorrect.

“Our retailer partners control their pricing strategies on Instacart, and we work with them to align online and in-store pricing wherever possible,” Instacart added.

As the Reuters report noted, this is all happening at a time when the cost of living remains a key concern for most Americans. Research by PYMNTS Intelligence has found that 42% of consumers surveyed in October were living paycheck to paycheck out of necessity rather than choice, an 18% increase since August.