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Washington, DC – Following a joint investigation by Consumer Reports, Groundwork Collaborative, and More Perfect Union into Instacart’s pricing practices, Instacart announced today in a company blog post that it is ending a program that resulted in different shoppers being shown different prices for groceries on its platform. The investigation found that Instacart’s algorithmic pricing experiments could result in price differences as high as 23% for certain products and could cost families more than $1,200 a year at checkout.
“We welcome Instacart’s decision to reverse course and end its secret, AI-driven pricing experiments on unsuspecting shoppers,” said Phil Radford, president and CEO of Consumer Reports. “At a time when everyday Americans are struggling with high prices, it is particularly egregious to see corporations secretly conducting individual experiments to charge different prices for the same products to get as much out of peoples’ pockets as possible. While it is encouraging to see Instacart end this practice, we urge policymakers across the country to take a closer look at these types of AI-pricing experiments on consumers.”
“Once we pulled back the curtain on Instacart’s hidden pricing experiments, the company had no choice but to reverse course,” said Lindsay Owens, executive director of Groundwork Collaborative. “But it shouldn’t take investigative research, public outcry, and the threat of FTC action to convince companies not to treat consumers like lab rats. Instacart is far from the only corporation using AI technologies to determine exactly how much profit they can extract from their customers by overcharging them. It’s time for regulators to put a stop to corporate pricing schemes and take action to restore fair, predictable, and transparent pricing.”
Following the publication of the joint investigation, U.S. Senator Ruben Gallego announced the introduction of the “One Fair Price Act,” which would prevent companies from using consumers’ personal data to set individualized prices. Separately, in Pennsylvania, a state senator cited the report in announcing plans to introduce similar legislation that would prohibit “surveillance pricing,” the use of personal data or demographic information, shopping history, and buyer behavior to set prices.
Additionally, at least 12 members of Congress followed suit with formal letters to Instacart and the FTC, which regulates U.S. grocery stores. The ranking member of the House Committee on Agriculture, U.S. Representative Angie Craig, sent a letter to Instacart, reiterating the report findings and requesting answers from the company regarding its pricing practices by mid-January. U.S. Senate Minority Leader Chuck Schumer sent a separate letter to the FTC, requesting that the agency investigate the company. A group of four Democratic House members known as the “Monopoly Busters Caucus” sent yet another letter to the FTC.
Seven senior Democratic senators, led by Amy Klobuchar and Cory Booker, have called on the FTC to investigate Instacart’s pricing strategies. This comes as Reuters reports that the commission is officially probing the company’s use of AI-driven pricing tools.
Founded in 1936, CR has a mission to create a fair and just marketplace for all. Widely known for our rigorous research and testing of products and services, we also survey millions of consumers each year, report extensively on marketplace issues, and advocate for consumer rights and protections around safety as well as digital rights, financial fairness, and sustainability. CR is independent and nonprofit.
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