“We’ve listened carefully to feedback from our customers,” Instacart said in its statement. “And we understand that the tests we ran with a small number of retail partners that resulted in different prices for the same item at the same store missed the mark for some customers. At a time when families are working exceptionally hard to stretch every grocery dollar, those tests raised concerns, leaving some people questioning the prices they see on Instacart. That’s not okay—especially for a company built on trust, transparency, and affordability.”
Instacart has not yet responded to CR’s questions about whether it would allow grocery retailers or food manufacturers to run price experiments with promotions and discounts on its platform.
Instacart’s reversal follows nearly two weeks of blowback from U.S. consumers, regulators, and politicians, many of whom objected to the use of algorithms, AI, and customer data to help set prices.
On Dec. 9, the day our findings were published, Sen. Ruben Gallego, D-Ariz., announced he was sponsoring the One Fair Price Act, which would prevent companies from using consumers’ personal data to set individualized prices. The legislation has since gained two additional co-sponsors, Sens. Kirsten Gillibrand, D-N.Y., and Cory Booker, D-N.J., and has been referred to the Senate Committee on Commerce, Science, and Transportation. Separately, in Pennsylvania, a state senator cited our reports in announcing a plan to introduce similar legislation that would ban “surveillance pricing,” the use of personal data or demographic information, shopping history, and buyer behavior to set prices.
In the two weeks after we published our findings, at least 12 members of Congress followed suit with formal letters to Instacart and/or the FTC, which regulates U.S. grocery stores. The ranking member of the House Committee on Agriculture, Rep. Angie Craig, D-Minn., sent a letter to Instacart, reiterating our findings and requesting answers from the company regarding its pricing practices by mid-January. Senate Minority Leader Chuck Schumer, D-N.Y., sent a separate letter to the FTC, requesting that the agency investigate the company. A group of four Democratic House members who call themselves the Monopoly Busters Caucus, including Craig, released a statement calling for the FTC and state regulators to “immediately investigate Instacart and hold it accountable for ripping off its customers.”
And a group of seven Democratic senators—including Sens. Amy Klobuchar, D-Minn., and Booker, ranking members of two separate subcommittees on privacy, technology, antitrust, and consumer rights issues—wrote to FTC Chairman Andrew Ferguson, a Republican appointed by former President Joe Biden and elevated to chair by President Donald Trump. Their letter raised concerns about Instacart’s pricing practices and asked the FTC to investigate.
“We are deeply concerned that Instacart’s pricing tactics may result in higher food prices, less competition, fewer opportunities to comparison shop, more incentive for companies to collect sensitive personal data, and increased customer confusion—potentially in violation of the FTC Act,” the letter from the seven senators says.
The FTC Act includes several provisions that prohibit “unfair or deceptive” commercial practices and allows the agency to enforce those laws and seek financial relief and penalties.
On Dec. 17, Reuters reported that the FTC had launched an investigation into Instacart’s pricing technology in response to our article and research. In a statement to CR the next day, the FTC wrote that it doesn’t comment on 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.”
Last week, in an unrelated case, the FTC and Instacart agreed to settle a case in which the regulator alleged that Instacart had advertised free delivery services and then charged consumers to have groceries delivered, and also failed to disclose to consumers who signed up for a free trial that they would be automatically enrolled in its subscription program. As part of a proposed settlement, Instacart will refund $60 million to customers who were charged for Instacart+ without their express informed consent, and the company is prohibited from “making misrepresentations concerning the costs of delivery services and satisfaction guarantees.”