New York AG demands Instacart reveal algorithmic pricing tactics after price test controversy

New York AG demands Instacart hand over information about price tests

Jan 8 (Reuters) - New York Attorney General Letitia James demanded information from Instacart (CART.O), opens new tab on Thursday, saying it may have violated the state's law requiring online retailers to disclose when they use consumers' information to set prices. The move comes after the online grocery and retail delivery platform faced intense criticism over a study in four U.S. cities by Consumer Reports and other nonprofits. It showed that Instacart displayed different prices to shoppers for the same groceries, resulting in a 7% average cost difference across shoppers for the same grocery list at the same store. Instacart said in December it had stopped price experiments, including those through its Eversight artificial intelligence pricing tool. The tests were randomized and never based on personal data or characteristics, Instacart said. The company nevertheless included a New York-mandated disclaimer that prices were "set by an algorithm using your personal data" on some of its store pages, stating that "certain prices and/or fees may vary based on randomized tests, we use personal information (such as delivery address) to calculate fees, and we offer certain personalized incentives." James said those disclaimers may not be sufficiently clear as required by New York law. "Instacart's pricing experiments raise serious concerns about its use of algorithmic pricing, and I will not hesitate to take action to enforce our laws and protect consumers," she said. She also called on the company to hand over its pricing agreements with retailers and brands, and explain how it chose which customers were included in pricing experiments. Reporting by Jody Godoy in New York; Editing by Cynthia Osterman Our Standards: The Thomson Reuters Trust Principles., opens new tab

Instacart stock falls after NY AG demands answers on algorithmic pricing By Investing.com

Investing.com -- Instacart (NASDAQ:CART) stock fell 2.1% Thursday after New York Attorney General Letitia James demanded information about the company's algorithmic pricing practices following a concerning study about price disparities. The Attorney General sent a letter to the online grocery delivery platform requesting details about its use of algorithmic pricing after research revealed customers were being charged significantly different prices for identical products. The study by Groundwork Collaborative and Consumer Reports found nearly three-quarters of grocery items in their experiment were offered at multiple price points on Instacart, with price differences averaging 13% and reaching as high as 23%. James warned that Instacart may be violating New York's Algorithmic Pricing Disclosure Act, which took effect on November 10, 2025. The law requires companies to clearly disclose when they use customers' personal data to set individualized prices with a prominent statement reading: "THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA." The AG's office noted that Instacart's current disclosures are "buried on a page only accessible by clicking on fine print text and are not clearly displayed near product prices," potentially failing to comply with legal requirements. According to the study, the price variations could cost a typical family of four an additional $1,200 annually. Although Instacart announced it was ending all "item price tests" after the study's publication, the company indicated that its retail partners could continue testing different promotions and discounts on the platform. The Attorney General is seeking comprehensive information about Instacart's pricing tactics, including details about agreements with retail partners, automated pricing tools, and compliance efforts with New York's disclosure requirements. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.