Instacart AI Pricing Tool Faces FTC Investigation

Federal regulators are reportedly seeking information about Instacart’s artificial intelligence (AI) pricing tool.

The Federal Trade Commission (FTC) has sent the grocery delivery platform a civil investigative demand asking 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.

Reached by PYMNTS, Instacart declined to comment on the potential investigation but shared a statement on the Consumer Reports study, saying that much of the resulting reporting has mischaracterized how pricing works on its platform.

“First, our retail partners control their pricing strategies, and we work with them to align their online and in-store pricing wherever possible,” a company spokesperson said.

“Second, these tests are not dynamic pricing nor surveillance pricing – prices on Instacart do not change in real time nor are they based on supply or demand, and we never use personal, demographic, or user-level behavioral data to set item prices. These tests are a form of randomized A/B testing, similar to the way retailers have long run pricing tests between different stores.”

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.