FTC Investigates Instacart Over AI Tool That Charges Different Prices

Federal Probe Triggered by Pricing Disparities

Instacart is facing a federal investigation after a damning study revealed the grocery delivery giant's artificial intelligence tool charges different customers different prices for identical items from the same store. The Federal Trade Commission has sent Instacart a civil investigative demand, seeking information about its AI-powered pricing tool , according to multiple sources.

The investigation stems from research showing some Instacart shoppers were presented with significantly different prices for the same item from the same store, with discrepancies as high as 23% . In one test involving 39 volunteers shopping at a Seattle Safeway, Instacart offered the same basket of groceries at 5 different prices, ranging from $114.34 to $123.93 — a difference of $9.59, or 8.4% .

The FTC stated it was "disturbed by what we have read in the press about Instacart's alleged pricing practices" , though the agency maintains its policy of not commenting on ongoing investigations. The probe comes at a time when Americans are already struggling with high grocery costs, making algorithmic pricing particularly controversial.

The AI Tool Under Scrutiny

The pricing tests were enabled by Instacart's AI pricing tool called Eversight, developed by a company it purchased in 2022 . Instacart's Eversight allows retailers to run price tests to gauge shoppers' reactions to higher or lower prices across different categories of items, with grocers who use Eversight seeing revenue growth of 1-3% .

Consumer Reports found evidence of price experimentation at four additional chains: Albertsons, Costco, Kroger, and Sprouts Farmers Market, with about three-quarters of the products checked being offered at different prices to different customers . Price variations for the same products ranged from as little as 7 cents to $2.56 per item .

The company describes this technology as "smart rounding," a "machine learning-driven tool that helps retailers improve price perception and drive incremental sales" that has led to "millions of dollars in annual incremental sales" for major grocery partners .

Company Response and Political Pressure

Instacart has pushed back against criticism, claiming the pricing practices have been misunderstood. The company states "prices on Instacart do not change in real time nor are they based on supply or demand, and we never use personal, demographic, or user-level behavioral data to set item prices. These tests are a form of randomized A/B testing, similar to the way retailers have long run pricing tests between different stores" .

Political pressure has been mounting rapidly. Rep. Angie Craig sent a letter asking for answers about pricing practices, while Senate Minority Leader Chuck Schumer separately asked the FTC to investigate the company . Rep. Robert Garcia also sent a letter to Instacart CEO Chris Rogers asking for a report on pricing practices .

News of the FTC probe sent Instacart shares lower by about 7% in extended trading , adding to investor concerns about the company's business practices and regulatory scrutiny.

Broader Implications for AI Pricing

This probe isn't the FTC's first foray into AI and data-driven pricing practices, as the agency under Chair Lina Khan previously demanded information from Mastercard, JPMorgan Chase, and other companies about tools they sell to analyze data and set prices . Some tools help companies gauge what shoppers are willing to pay based on past purchases, location, and other data about online activity .

The investigation comes as grocery costs remain a top concern for American families, making any perception of unfair pricing politically sensitive. While a civil investigative demand doesn't mean the FTC is accusing a company of wrongdoing, it does indicate an interest in how exactly the pricing tool works, what data it leverages, and who ends up paying more as a result .

The outcome could reshape how AI-driven pricing operates across the retail industry. As more companies adopt algorithmic pricing tools, this case may establish important precedents about transparency, fairness, and consumer protection in the age of artificial intelligence.