Instacart Ends AI Pricing Tests After FTC Investigation and Public Backlash Over Price Discrepancies
20 Sources
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Instacart scraps AI pricing tests that made some products more expensive
Instacart is ending its AI-powered pricing tests, which led some users to see higher prices on certain products than others. "Now, if two families are shopping for the same items, at the same time, from the same store location on Instacart, they see the same prices -- period," Instacart writes in a
[2]
Instacart Ends AI Pricing Tests Showing Different Prices for the Same Items
Instacart has ended its AI-powered pricing tests following backlash after a study reported customers were shown different prices for the same items from the same store. "Effective immediately, Instacart is ending all item price tests on our platform. Retailers will no longer be able to use
[3]
Big Take: Instacart Ends Its AI-Pricing Experiment
Big Take: Instacart Ends Its AI-Pricing Experiment This month, the think-tank the Groundwork Collaborative, Consumer Reports and the news nonprofit More Perfect Union released a report finding that Instacart had been using an AI tool to run algorithmic price experiments on shoppers around the
[4]
The FTC is reportedly investigating Instacart over its AI pricing tool
The Federal Trade Commission has sent Instacart a civil investigative demand, seeking information about its AI-powered pricing tool, according to Reuters. This comes after a recently published pricing experiment study showed that the online grocery delivery app gave different users different prices
[5]
Instacart shares plunge 11% on report that FTC is probing company over AI pricing tool
Shares of grocery delivery service Instacart dropped as much as 11% in extended trading on Wednesday, following a report that said the U.S. Federal Trade Commission has begun an investigation into the company's pricing practices. The FTC sent a civil investigative demand to Instacart, Reuters
[6]
Instacart says it doesn't manipulate prices using AI, but the FTC isn't convinced
Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. The big picture: Since its debut in 2012, Instacart has faced several controversies related to the pay structure of its workers, tipping policies, and working conditions. The company is now the
[7]
Feds Probe Instacart's Al-Fueled Pricing Experiments on Groceries
A recent investigation that found Instacart is charging some customers nearly 25% more for the same products from the same store got a lot of people's attention, including the Federal Trade Commission. According to a report from Reuters, the agency has opened a probe into Instacart's pricing
[8]
Instacart halts AI testing program that raised costs for some shoppers
After listening to customer feedback, Instacart said its AI price testing program "missed the mark for some customers." (Richard Drew/AP) Instacart is ending its AI price-testing program, which led to customers seeing different prices for the same item at the same store at the same time, the
[9]
Instacart is ending controversial price tests
Credit: Thomas Fuller/SOPA Images/LightRocket via Getty Images Grocery delivery service Instacart will end its controversial price tests, it announced on Monday. The move comes weeks after a Consumer Reports investigation claimed that Instacart's AI-enabled price experiments may be upping your
[10]
Instacart may have charged you more for the same groceries and it's just another case of AI hell
A new investigation by Consumer Reports, in collaboration with Groundwork Collaborative and More Perfect Union, suggests that Instacart's use of artificial intelligence in pricing experiments may have resulted in shoppers paying different amounts for the same groceries. The findings point to a
[11]
Instacart to end AI price tests for retailers following investigation
Mary Cunningham is a reporter for CBS MoneyWatch. She previously worked at "60 Minutes," CBSNews.com and CBS News 24/7 as part of the CBS News Associate Program. Instacart said Monday that it would halt the use of an AI-powered tool that allowed retailers to charge customers different prices for
[12]
Instacart to halt 'item price tests' amid scrutiny of its AI tool for retailers
An Instacart delivery order pickup sign outside a grocery store in New York City in 2024. The company announced Monday it will no longer let retailers use its AI program to test prices. Yuki Iwamura / Bloomberg via Getty Images Instacart is ending its "item price tests" for retailers, the company
[13]
Instacart shuts down dynamic AI pricing experiments following scrutiny of its tests - SiliconANGLE
Instacart shuts down dynamic AI pricing experiments following scrutiny of its tests Instacart operator Maplebear Inc. said today that it's going to cancel a controversial experiment that used artificial intelligence to show different prices for different products to some consumers. The company
[14]
Instacart ends price tests on groceries after customer feedback
Some tests resulted in different prices for the same items, raising concerns. It's back to business as usual for Instacart. The grocery delivery service has announced it will end price testing, following customer concerns over a recent study that showed the company's AI technology allowed
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Instacart Stock Drops Over 6% In Thursday Pre-Market: What's Going On? - Maplebear (NASDAQ:CART)
Shares of Instacart Inc. (NYSE:CART) declined 6.64% in pre-market trading on Thursday, after a report that the Federal Trade Commission (FTC) is launching a probe into its AI-based pricing tool. FTC Probes Instacart AI Pricing Tool The FTC has issued a civil investigative demand to Instacart,
[16]
Instacart stock falls on report of FTC probe over AI pricing tool (CART:NASDAQ)
Instacart (CART) shares fell nearly 7% premarket on Thursday after a Reuters report said the U.S. Federal Trade Commission (FTC) is probing the company's AI pricing tool. Citing two sources, the news outlet reported that the agency sent the company a The FTC probe has led to a nearly 7% drop in
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Instacart AI Pricing Tool Faces FTC Investigation | PYMNTS.com
By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. The Federal Trade Commission (FTC) has sent the grocery delivery platform a
[18]
FTC probing Instacart's AI pricing tool after being caught charging...
The Federal Trade Commission is probing Instacart, two sources familiar with the matter told Reuters, as the retail platform faces criticism over its artificial intelligence-driven pricing tool. The agency has sent the company a civil investigative demand, the sources said. The FTC is seeking
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Instacart shares slide on report of FTC investigation into AI pricing By Investing.com
Investing.com-- Instacart (NASDAQ:CART) shares tumbled in aftermarket trade on Wednesday after Reuters reported the online grocery firm was under investigation by the U.S. Federal Trade Commission over allegations of price discrimination using artificial intelligence. Instacart slid as much as 11%
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FTC probes Instacart's AI pricing tool, source says; shares drop
Dec 17 (Reuters) - The U.S. Federal Trade Commission is probing Instacart, two sources familiar with the matter told Reuters, as the retail platform faces criticism over its artificial intelligence-driven pricing tool. Instacart shares were down about 10% in after-hours trading. The agency has
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Instacart has terminated its AI pricing tests following regulatory scrutiny and consumer outcry. A study found that shoppers saw different prices for the same items from the same store, with variations averaging 13% and potentially costing families an extra $1,200 annually. The Federal Trade Commission launched an investigation, and lawmakers including Sen. Chuck Schumer demanded transparency. The company will no longer allow retailers to use its Eversight technology for pricing experiments.
Instacart Halts Controversial AI Pricing Tests
Instacart has terminated its AI pricing tests effective immediately, ending a practice that showed different prices for the same items to different customers shopping from identical store locations
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. The online grocery delivery app announced in a blog post that "if two families are shopping for the same items, at the same time, from the same store location on Instacart, they see the same prices -- period"2
. The decision follows intense regulatory scrutiny and public backlash after a comprehensive study exposed the extent of price discrepancies on the platform.
Source: New York Post
Study Reveals Significant Price Variations
A joint investigation by Consumer Reports, Groundwork Collaborative, and More Perfect Union uncovered troubling patterns in Instacart's pricing practices
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. The study involved 437 volunteers conducting live tests across four cities, instructing participants to add identical items to their carts simultaneously. The results showed that approximately 74% of testers encountered price variations, with the average difference between the highest and lowest prices for an item reaching 13%2
. Some shoppers saw prices up to 23% higher than others for the exact same products4
. Researchers calculated that these higher prices for some customers could force an average American family of four to pay an extra $1,200 annually, though Instacart disputed this projection2
.
Source: TechSpot
FTC Investigation and Congressional Pressure
The Federal Trade Commission swiftly responded to the revelations by sending Instacart a civil investigative demand seeking information about its AI-powered pricing tool
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. The FTC investigation prompted Instacart shares to plunge 11% in extended trading5
. The agency stated it was "disturbed by what we have read in the press about Instacart's alleged pricing practices"4
. Multiple lawmakers joined the call for accountability, with Sen. Chuck Schumer writing to the Federal Trade Commission that "consumers deserve to know when they are being placed into pricing tests" and urging the agency to require prominent on-screen labels1
. Sen. Amy Klobuchar and seven other senators also pushed for investigation, with Klobuchar stating that "Grocery prices are already too high -- Americans shouldn't be forced to pay even more because companies use artificial intelligence to inflate prices"2
.
Source: Market Screener
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The Role of Eversight Technology
The price variations stemmed from Instacart's use of Eversight, an AI-powered pricing tool acquired in 2022 for $59 million
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. Instacart had purchased the company specializing in artificial intelligence-driven pricing and promotions to "create compelling savings opportunities for customers in real-time"5
. Retail partners used this technology to conduct what Instacart characterized as "limited, short-term and randomized tests" through A/B tests to understand price sensitivity2
. The company maintained these experiments weren't dynamic pricing and emphasized that "prices on Instacart do not change in real time" and were never based on user data, shopping behavior, demographics, or personal information4
.Mounting Challenges for Instacart
The AI pricing controversy compounds recent difficulties for the company. Last week, Instacart reached a $60 million settlement with the FTC over separate allegations involving misleading delivery fees and deceptive tactics, including falsely advertising free shipping
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. The company acknowledged in its announcement 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"1
. While retailers may still vary prices on a store-by-store basis, Instacart will no longer permit the use of Eversight technology for pricing experiments on its platform1
. The incident raises broader questions about algorithmic pricing transparency in e-commerce, particularly as grocery costs remain elevated and consumers face continued financial pressure.References
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