The FTC has opened an inquiry into Instacart over its AI pricing tool, Eversight, issuing a civil investigative demand as shares fell about 10%.
A nonprofit study of 437 shoppers across four U.S. cities found an average 7% price variance for identical grocery lists, with some shoppers seeing prices up to 23% higher. Instacart says tests are randomized and that retailers generally set prices. Lawmakers have urged clearer on-screen notices for consumers included in pricing experiments.
Dec 17 (Reuters) - The U.S. Federal Trade Commission has opened a probe into Instacart, two people familiar with the matter told Reuters, focusing on the company’s use of an artificial intelligence-powered pricing product called Eversight. Instacart shares fell roughly 10% in after-hours trading after the news.
The FTC has issued a civil investigative demand seeking documents and information related to Eversight, which enables retailers on Instacart’s platform to run AI-driven price experiments. The agency declined to comment on ongoing inquiries but said it was concerned by recent press reports about Instacart’s pricing practices.
A nonprofit study by Groundwork Collaborative, Consumer Reports and More Perfect Union tracked 437 shoppers viewing Instacart prices across four U.S. cities. Researchers found an average 7% variance in the total cost for identical grocery lists at the same store, and reported that some shoppers encountered prices up to 23% higher than prices shown to other shoppers for the exact same items at the same time.
Instacart says Eversight lets retailers run randomized price tests to measure shopper reactions, and that most items on its marketplace are priced by the retailers themselves. The company’s website says grocers using Eversight typically see revenue gains of 1%–3%.
Instacart also noted an exception involving Target: while most retailers set their own prices, Instacart has said it collects publicly available Target prices and adds a margin to cover its costs. A Target spokesperson said the retailer is not affiliated with Instacart and does not control prices set by the platform.
Lawmakers have raised concerns about undisclosed pricing experiments. Senate Majority Leader Chuck Schumer urged the FTC to require clear on-screen disclosures when consumers are part of pricing tests. The probe comes amid growing regulatory interest in how AI and data-driven tools influence pricing: last year the FTC requested information from firms including Mastercard, JPMorgan Chase, Accenture and McKinsey about tools used to analyze consumer data and set prices or discounts.
What This Means: The opening of an FTC inquiry signals regulatory attention, but a probe does not itself imply wrongdoing and not all investigations lead to enforcement action.
(Reporting by Jody Godoy in New York; Editing by Chris Sanders, David Gregorio and Stephen Coates.)
Help us improve.
